Correlation Between BLUESCOPE STEEL and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and GFL ENVIRONM 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 GFL ENVIRONM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and GFL ENVIRONM, you can compare the effects of market volatilities on BLUESCOPE STEEL and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and GFL ENVIRONM.
Diversification Opportunities for BLUESCOPE STEEL and GFL ENVIRONM
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BLUESCOPE and GFL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 are associated (or correlated) with GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and GFL ENVIRONM
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to under-perform the GFL ENVIRONM. But the stock apears to be less risky and, when comparing its historical volatility, BLUESCOPE STEEL is 1.05 times less risky than GFL ENVIRONM. The stock trades about 0.0 of its potential returns per unit of risk. The GFL ENVIRONM is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,116 in GFL ENVIRONM on August 28, 2024 and sell it today you would earn a total of 1,244 from holding GFL ENVIRONM or generate 39.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. GFL ENVIRONM
Performance |
| Timeline |
| BLUESCOPE STEEL |
| GFL ENVIRONM |
BLUESCOPE STEEL and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and GFL ENVIRONM
The main advantage of trading using opposite BLUESCOPE STEEL and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc |
| GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. NMI Holdings | GFL ENVIRONM vs. Origin Agritech | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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