Correlation Between Aneka Tambang and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang 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 Aneka Tambang and Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Tbk and Bluescope Steel, you can compare the effects of market volatilities on Aneka Tambang 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 Aneka Tambang with a short position of Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Bluescope Steel.
Diversification Opportunities for Aneka Tambang and Bluescope Steel
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aneka and Bluescope is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel and Aneka Tambang 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 Aneka Tambang Tbk 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 Aneka Tambang i.e., Aneka Tambang and Bluescope Steel go up and down completely randomly.
Pair Corralation between Aneka Tambang and Bluescope Steel
Assuming the 90 days trading horizon Aneka Tambang is expected to generate 911.5 times less return on investment than Bluescope Steel. But when comparing it to its historical volatility, Aneka Tambang Tbk is 3.48 times less risky than Bluescope Steel. It trades about 0.0 of its potential returns per unit of risk. Bluescope Steel is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,884 in Bluescope Steel on November 2, 2024 and sell it today you would earn a total of 214.00 from holding Bluescope Steel or generate 11.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aneka Tambang Tbk vs. Bluescope Steel
Performance |
Timeline |
Aneka Tambang Tbk |
Bluescope Steel |
Aneka Tambang and Bluescope Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aneka Tambang and Bluescope Steel
The main advantage of trading using opposite Aneka Tambang and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang 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.Aneka Tambang vs. Iron Road | Aneka Tambang vs. Nufarm Finance NZ | Aneka Tambang vs. Australian Agricultural | Aneka Tambang vs. Bluescope Steel |
Bluescope Steel vs. Truscott Mining Corp | Bluescope Steel vs. Credit Clear | Bluescope Steel vs. Andean Silver Limited | Bluescope Steel vs. Perpetual Credit Income |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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