Correlation Between Spring Valley and Worthington Steel

Can any of the company-specific risk be diversified away by investing in both Spring Valley and Worthington 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 Spring Valley and Worthington Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Spring Valley Acquisition and Worthington Steel, you can compare the effects of market volatilities on Spring Valley and Worthington 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 Spring Valley with a short position of Worthington Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Worthington Steel.

Diversification Opportunities for Spring Valley and Worthington Steel

0.48

Correlation Coefficient

Spring Valley  Worthington Steel

Very weak diversification

The 3 months correlation between Spring and Worthington is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Spring Valley i.e., Spring Valley and Worthington Steel go up and down completely randomly.

Pair Corralation between Spring Valley and Worthington Steel

Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 5.04 times more return on investment than Worthington Steel. However, Spring Valley is 5.04 times more volatile than Worthington Steel. It trades about 0.21 of its potential returns per unit of risk. Worthington Steel is currently generating about 0.06 per unit of risk. If you would invest  9.95  in Spring Valley Acquisition on May 14, 2025 and sell it today you would earn a total of  19.04  from holding Spring Valley Acquisition or generate 191.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.81%
Values	Daily Returns

Spring Valley Acquisition  vs.  Worthington Steel

Spring Valley Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spring Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Worthington Steel

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Worthington Steel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Worthington Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spring Valley and Worthington Steel

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

The idea behind Spring Valley Acquisition and Worthington Steel 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.