Correlation Between Tejon Ranch and Steel Partners
Can any of the company-specific risk be diversified away by investing in both Tejon Ranch and Steel Partners 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 Tejon Ranch and Steel Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tejon Ranch Co and Steel Partners Holdings, you can compare the effects of market volatilities on Tejon Ranch and Steel Partners 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 Tejon Ranch with a short position of Steel Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tejon Ranch and Steel Partners.
Diversification Opportunities for Tejon Ranch and Steel Partners
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tejon and Steel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tejon Ranch Co and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings and Tejon Ranch 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 Tejon Ranch Co are associated (or correlated) with Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of Tejon Ranch i.e., Tejon Ranch and Steel Partners go up and down completely randomly.
Pair Corralation between Tejon Ranch and Steel Partners
Considering the 90-day investment horizon Tejon Ranch Co is expected to generate 0.69 times more return on investment than Steel Partners. However, Tejon Ranch Co is 1.46 times less risky than Steel Partners. It trades about 0.0 of its potential returns per unit of risk. Steel Partners Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,754 in Tejon Ranch Co on March 12, 2025 and sell it today you would lose (113.00) from holding Tejon Ranch Co or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.15% |
| Values | Daily Returns |
Tejon Ranch Co vs. Steel Partners Holdings
Performance |
| Timeline |
| Tejon Ranch |
| Steel Partners Holdings |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Tejon Ranch and Steel Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tejon Ranch and Steel Partners
The main advantage of trading using opposite Tejon Ranch and Steel Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tejon Ranch position performs unexpectedly, Steel Partners 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 Steel Partners will offset losses from the drop in Steel Partners' long position.| Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International | Tejon Ranch vs. Griffon |
| Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Tejon Ranch Co |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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