Correlation Between Aperam PK and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both Aperam PK 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 Aperam PK and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aperam PK and BlueScope Steel Ltd, you can compare the effects of market volatilities on Aperam PK 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 Aperam PK with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam PK and BlueScope Steel.
Diversification Opportunities for Aperam PK and BlueScope Steel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aperam and BlueScope is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aperam PK and BlueScope Steel Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and Aperam PK 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 Aperam PK 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 Aperam PK i.e., Aperam PK and BlueScope Steel go up and down completely randomly.
Pair Corralation between Aperam PK and BlueScope Steel
Assuming the 90 days horizon Aperam PK is expected to generate 1.68 times less return on investment than BlueScope Steel. In addition to that, Aperam PK is 1.11 times more volatile than BlueScope Steel Ltd. It trades about 0.02 of its total potential returns per unit of risk. BlueScope Steel Ltd is currently generating about 0.03 per unit of volatility. If you would invest 5,707 in BlueScope Steel Ltd on August 28, 2024 and sell it today you would earn a total of 1,172 from holding BlueScope Steel Ltd or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.06% |
| Values | Daily Returns |
Aperam PK vs. BlueScope Steel Ltd
Performance |
| Timeline |
| Aperam PK |
| BlueScope Steel |
Aperam PK and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aperam PK and BlueScope Steel
The main advantage of trading using opposite Aperam PK and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aperam PK 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.| Aperam PK vs. Algoma Steel Group | Aperam PK vs. Kumba Iron Ore | Aperam PK vs. Synalloy | Aperam PK vs. Acerinox SA ADR |
| BlueScope Steel vs. Olympic Steel | BlueScope Steel vs. Mesabi Trust | BlueScope Steel vs. Universal Stainless Alloy | BlueScope Steel vs. POSCO Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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