Correlation Between BlueScope Steel and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both BlueScope Steel and ANGI Homeservices 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 BlueScope Steel and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueScope Steel Limited and ANGI Homeservices, you can compare the effects of market volatilities on BlueScope Steel and ANGI Homeservices 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 BlueScope Steel with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and ANGI Homeservices.
Diversification Opportunities for BlueScope Steel and ANGI Homeservices
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between BlueScope and ANGI is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Limited and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and BlueScope Steel 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 BlueScope Steel Limited are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and ANGI Homeservices go up and down completely randomly.
Pair Corralation between BlueScope Steel and ANGI Homeservices
Assuming the 90 days horizon BlueScope Steel Limited is expected to generate 0.45 times more return on investment than ANGI Homeservices. However, BlueScope Steel Limited is 2.21 times less risky than ANGI Homeservices. It trades about 0.02 of its potential returns per unit of risk. ANGI Homeservices is currently generating about 0.0 per unit of risk. If you would invest 1,229 in BlueScope Steel Limited on August 29, 2024 and sell it today you would earn a total of 81.00 from holding BlueScope Steel Limited or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueScope Steel Limited vs. ANGI Homeservices
Performance |
| Timeline |
| BlueScope Steel |
| ANGI Homeservices |
BlueScope Steel and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueScope Steel and ANGI Homeservices
The main advantage of trading using opposite BlueScope Steel and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.| BlueScope Steel vs. AM EAGLE OUTFITTERS | BlueScope Steel vs. International Game Technology | BlueScope Steel vs. Apollo Investment Corp | BlueScope Steel vs. Penn National Gaming |
| ANGI Homeservices vs. Webster Financial | ANGI Homeservices vs. ATOSS SOFTWARE | ANGI Homeservices vs. FORMPIPE SOFTWARE AB | ANGI Homeservices vs. CDN IMPERIAL BANK |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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