Correlation Between Reliance Steel and AK Steel
Can any of the company-specific risk be diversified away by investing in both Reliance Steel and AK 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 Reliance Steel and AK Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Steel Aluminum and AK Steel Holding, you can compare the effects of market volatilities on Reliance Steel and AK 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 Reliance Steel with a short position of AK Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and AK Steel.
Diversification Opportunities for Reliance Steel and AK Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Reliance and AKS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and AK Steel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AK Steel Holding and Reliance 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 Reliance Steel Aluminum are associated (or correlated) with AK Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AK Steel Holding has no effect on the direction of Reliance Steel i.e., Reliance Steel and AK Steel go up and down completely randomly.
Pair Corralation between Reliance Steel and AK 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 |
Reliance Steel Aluminum vs. AK Steel Holding
Performance |
Timeline |
Reliance Steel Aluminum |
AK Steel Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Reliance Steel and AK Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Reliance Steel and AK Steel
The main advantage of trading using opposite Reliance Steel and AK Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, AK 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 AK Steel will offset losses from the drop in AK Steel's long position.Reliance Steel vs. Universal Stainless Alloy | Reliance Steel vs. Outokumpu Oyj ADR | Reliance Steel vs. Olympic Steel | Reliance Steel vs. POSCO Holdings |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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