Correlation Between Steel Dynamics and Hycroft Mining
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Hycroft Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Steel Dynamics and Hycroft Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Hycroft Mining Holding, you can compare the effects of market volatilities on Steel Dynamics and Hycroft Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Steel Dynamics with a short position of Hycroft Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Hycroft Mining.
Diversification Opportunities for Steel Dynamics and Hycroft Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Hycroft is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Hycroft Mining Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hycroft Mining Holding and Steel Dynamics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Steel Dynamics are associated (or correlated) with Hycroft Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hycroft Mining Holding has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Hycroft Mining go up and down completely randomly.
Pair Corralation between Steel Dynamics and Hycroft Mining
Given the investment horizon of 90 days Steel Dynamics is expected to generate 0.1 times more return on investment than Hycroft Mining. However, Steel Dynamics is 10.22 times less risky than Hycroft Mining. It trades about 0.1 of its potential returns per unit of risk. Hycroft Mining Holding is currently generating about 0.0 per unit of risk. If you would invest 12,965 in Steel Dynamics on March 2, 2024 and sell it today you would earn a total of 385.00 from holding Steel Dynamics or generate 2.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Dynamics vs. Hycroft Mining Holding
Performance |
Timeline |
Steel Dynamics |
Hycroft Mining Holding |
Steel Dynamics and Hycroft Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Dynamics and Hycroft Mining
The main advantage of trading using opposite Steel Dynamics and Hycroft Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Hycroft Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hycroft Mining will offset losses from the drop in Hycroft Mining's long position.Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. Reliance Steel Aluminum | Steel Dynamics vs. Olympic Steel | Steel Dynamics vs. Commercial Metals |
Hycroft Mining vs. Harmony Gold Mining | Hycroft Mining vs. Kinross Gold | Hycroft Mining vs. Pan American Silver | Hycroft Mining vs. Gold Fields Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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