Correlation Between North West and Russel Metals

Can any of the company-specific risk be diversified away by investing in both North West and Russel Metals 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 North West and Russel Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The North West and Russel Metals, you can compare the effects of market volatilities on North West and Russel Metals 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 North West with a short position of Russel Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of North West and Russel Metals.

Diversification Opportunities for North West and Russel Metals

0.0

Correlation Coefficient

North West  Russel Metals

Pay attention - limited upside

The 3 months correlation between North and Russel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The North West and Russel Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russel Metals and North West 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 The North West are associated (or correlated) with Russel Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russel Metals has no effect on the direction of North West i.e., North West and Russel Metals go up and down completely randomly.

Pair Corralation between North West and Russel Metals

If you would invest (100.00) in Russel Metals on May 6, 2025 and sell it today you would earn a total of  100.00  from holding Russel Metals 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

The North West  vs.  Russel Metals

North West

Risk-Adjusted Performance

Very Weak

Over the last 90 days The North West has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Russel Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Russel Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Russel Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with North West and Russel Metals

The main advantage of trading using opposite North West and Russel Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North West position performs unexpectedly, Russel Metals 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 Russel Metals will offset losses from the drop in Russel Metals' long position.

The idea behind The North West and Russel Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.