Correlation Between BlueScope Steel and Spacefy
Can any of the company-specific risk be diversified away by investing in both BlueScope Steel and Spacefy 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 Spacefy 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 Spacefy, you can compare the effects of market volatilities on BlueScope Steel and Spacefy 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 Spacefy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and Spacefy.
Diversification Opportunities for BlueScope Steel and Spacefy
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BlueScope and Spacefy is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Limited and Spacefy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spacefy 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 Spacefy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spacefy has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and Spacefy go up and down completely randomly.
Pair Corralation between BlueScope Steel and Spacefy
Assuming the 90 days horizon BlueScope Steel Limited is expected to under-perform the Spacefy. But the stock apears to be less risky and, when comparing its historical volatility, BlueScope Steel Limited is 162.39 times less risky than Spacefy. The stock trades about -0.04 of its potential returns per unit of risk. The Spacefy is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Spacefy on September 12, 2024 and sell it today you would earn a total of 2.10 from holding Spacefy or generate 4200.0% 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. Spacefy
Performance |
| Timeline |
| BlueScope Steel |
| Spacefy |
BlueScope Steel and Spacefy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueScope Steel and Spacefy
The main advantage of trading using opposite BlueScope Steel and Spacefy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel position performs unexpectedly, Spacefy 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 Spacefy will offset losses from the drop in Spacefy's long position.| BlueScope Steel vs. COSMOSTEEL HLDGS | BlueScope Steel vs. Tyson Foods | BlueScope Steel vs. Daido Steel Co | BlueScope Steel vs. Tianjin Capital Environmental |
| Spacefy vs. LEGACY IRON ORE | Spacefy vs. NIPPON STEEL SPADR | Spacefy vs. MITSUBISHI STEEL MFG | Spacefy vs. BlueScope Steel Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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