Correlation Between SEAZEN GROUP and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both SEAZEN GROUP and BlueScope 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 SEAZEN GROUP and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEAZEN GROUP LTD and BlueScope Steel Limited, you can compare the effects of market volatilities on SEAZEN GROUP and BlueScope 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 SEAZEN GROUP with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEAZEN GROUP and BlueScope Steel.
Diversification Opportunities for SEAZEN GROUP and BlueScope Steel
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEAZEN and BlueScope is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SEAZEN GROUP LTD and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and SEAZEN GROUP 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 SEAZEN GROUP LTD are associated (or correlated) with BlueScope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueScope Steel has no effect on the direction of SEAZEN GROUP i.e., SEAZEN GROUP and BlueScope Steel go up and down completely randomly.
Pair Corralation between SEAZEN GROUP and BlueScope Steel
Assuming the 90 days trading horizon SEAZEN GROUP LTD is expected to under-perform the BlueScope Steel. In addition to that, SEAZEN GROUP is 1.17 times more volatile than BlueScope Steel Limited. It trades about -0.2 of its total potential returns per unit of risk. BlueScope Steel Limited is currently generating about 0.14 per unit of volatility. If you would invest 1,230 in BlueScope Steel Limited on August 31, 2024 and sell it today you would earn a total of 110.00 from holding BlueScope Steel Limited or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SEAZEN GROUP LTD vs. BlueScope Steel Limited
Performance |
| Timeline |
| SEAZEN GROUP LTD |
| BlueScope Steel |
SEAZEN GROUP and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEAZEN GROUP and BlueScope Steel
The main advantage of trading using opposite SEAZEN GROUP and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEAZEN GROUP position performs unexpectedly, BlueScope 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 BlueScope Steel will offset losses from the drop in BlueScope Steel's long position.| SEAZEN GROUP vs. China Resources Land | SEAZEN GROUP vs. CTP NV EO | SEAZEN GROUP vs. Superior Plus Corp | SEAZEN GROUP vs. NMI Holdings |
| BlueScope Steel vs. Nippon Steel | BlueScope Steel vs. POSCO Holdings | BlueScope Steel vs. Toyota Tsusho | BlueScope Steel vs. Reliance Steel Aluminum |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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