Correlation Between Steel Dynamics and GoldMining
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and GoldMining, you can compare the effects of market volatilities on Steel Dynamics and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and GoldMining.
Diversification Opportunities for Steel Dynamics and GoldMining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and GoldMining is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and GoldMining go up and down completely randomly.
Pair Corralation between Steel Dynamics and GoldMining
Given the investment horizon of 90 days Steel Dynamics is expected to generate 1.2 times more return on investment than GoldMining. However, Steel Dynamics is 1.2 times more volatile than GoldMining. It trades about 0.04 of its potential returns per unit of risk. GoldMining is currently generating about -0.07 per unit of risk. If you would invest 12,444 in Steel Dynamics on March 16, 2025 and sell it today you would earn a total of 741.00 from holding Steel Dynamics or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Dynamics vs. GoldMining
Performance |
| Timeline |
| Steel Dynamics |
| GoldMining |
Steel Dynamics and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and GoldMining
The main advantage of trading using opposite Steel Dynamics and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| GoldMining vs. Gold Royalty Corp | GoldMining vs. Uranium Royalty Corp | GoldMining vs. Metalla Royalty Streaming | GoldMining vs. Equinox Gold Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |