Correlation Between Russel Metals and MDA
Can any of the company-specific risk be diversified away by investing in both Russel Metals and MDA 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 Russel Metals and MDA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Russel Metals and MDA, you can compare the effects of market volatilities on Russel Metals and MDA 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 Russel Metals with a short position of MDA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Russel Metals and MDA.
Diversification Opportunities for Russel Metals and MDA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Russel and MDA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Russel Metals and MDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDA and Russel Metals 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 Russel Metals are associated (or correlated) with MDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDA has no effect on the direction of Russel Metals i.e., Russel Metals and MDA go up and down completely randomly.
Pair Corralation between Russel Metals and MDA
Assuming the 90 days trading horizon Russel Metals is expected to generate 0.28 times more return on investment than MDA. However, Russel Metals is 3.58 times less risky than MDA. It trades about -0.04 of its potential returns per unit of risk. MDA is currently generating about -0.02 per unit of risk. If you would invest 4,398 in Russel Metals on July 27, 2025 and sell it today you would lose (166.00) from holding Russel Metals or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Russel Metals vs. MDA
Performance |
| Timeline |
| Russel Metals |
| MDA |
Russel Metals and MDA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Russel Metals and MDA
The main advantage of trading using opposite Russel Metals and MDA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Russel Metals position performs unexpectedly, MDA 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 MDA will offset losses from the drop in MDA's long position.| Russel Metals vs. Badger Infrastructure Solutions | Russel Metals vs. Andlauer Healthcare Gr | Russel Metals vs. ADENTRA | Russel Metals vs. Bird Construction |
| MDA vs. Exchange Income | MDA vs. Brookfield Business Partners | MDA vs. Secure Energy Services | MDA vs. Air Canada |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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