Correlation Between AK Steel and Reliance Steel
Can any of the company-specific risk be diversified away by investing in both AK Steel and Reliance Steel 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 AK Steel and Reliance Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AK Steel Holding and Reliance Steel Aluminum, you can compare the effects of market volatilities on AK Steel and Reliance Steel 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 AK Steel with a short position of Reliance Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AK Steel and Reliance Steel.
Diversification Opportunities for AK Steel and Reliance Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AKS and Reliance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AK Steel Holding and Reliance Steel Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Steel Aluminum and AK Steel 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 AK Steel Holding are associated (or correlated) with Reliance Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Steel Aluminum has no effect on the direction of AK Steel i.e., AK Steel and Reliance Steel go up and down completely randomly.
Pair Corralation between AK Steel and Reliance Steel
If you would invest (100.00) in AK Steel Holding on January 31, 2024 and sell it today you would earn a total of 100.00 from holding AK Steel Holding or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
AK Steel Holding vs. Reliance Steel Aluminum
Performance |
Timeline |
AK Steel Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Reliance Steel Aluminum |
AK Steel and Reliance Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AK Steel and Reliance Steel
The main advantage of trading using opposite AK Steel and Reliance Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AK Steel position performs unexpectedly, Reliance Steel 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 Reliance Steel will offset losses from the drop in Reliance Steel's long position.AK Steel vs. SEI Investments | AK Steel vs. Willamette Valley Vineyards | AK Steel vs. Anheuser Busch Inbev | AK Steel vs. US Global Investors |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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