Correlation Between ABACUS STORAGE and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE 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 ABACUS STORAGE and Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Bluescope Steel, you can compare the effects of market volatilities on ABACUS STORAGE 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 ABACUS STORAGE with a short position of Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Bluescope Steel.
Diversification Opportunities for ABACUS STORAGE and Bluescope Steel
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ABACUS and Bluescope is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel and ABACUS STORAGE 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 ABACUS STORAGE KING 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 ABACUS STORAGE i.e., ABACUS STORAGE and Bluescope Steel go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Bluescope Steel
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 35.46 times more return on investment than Bluescope Steel. However, ABACUS STORAGE is 35.46 times more volatile than Bluescope Steel. It trades about 0.05 of its potential returns per unit of risk. Bluescope Steel is currently generating about 0.03 per unit of risk. If you would invest 114.00 in ABACUS STORAGE KING on September 3, 2024 and sell it today you would earn a total of 7.00 from holding ABACUS STORAGE KING or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Bluescope Steel
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Bluescope Steel |
ABACUS STORAGE and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Bluescope Steel
The main advantage of trading using opposite ABACUS STORAGE and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE 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.| ABACUS STORAGE vs. Champion Iron | ABACUS STORAGE vs. iShares Global Healthcare | ABACUS STORAGE vs. Peel Mining | ABACUS STORAGE vs. Australian Dairy Farms |
| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Aneka Tambang Tbk |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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