Correlation Between BLUESCOPE STEEL and Boiron SA
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Boiron SA 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 Boiron SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Boiron SA, you can compare the effects of market volatilities on BLUESCOPE STEEL and Boiron SA 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Boiron SA.
Diversification Opportunities for BLUESCOPE STEEL and Boiron SA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BLUESCOPE and Boiron is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Boiron SA go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Boiron SA
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 0.92 times more return on investment than Boiron SA. However, BLUESCOPE STEEL is 1.09 times less risky than Boiron SA. It trades about 0.03 of its potential returns per unit of risk. Boiron SA is currently generating about -0.01 per unit of risk. If you would invest 1,074 in BLUESCOPE STEEL on August 28, 2024 and sell it today you would earn a total of 226.00 from holding BLUESCOPE STEEL or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Boiron SA
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Boiron SA |
BLUESCOPE STEEL and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Boiron SA
The main advantage of trading using opposite BLUESCOPE STEEL and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| BLUESCOPE STEEL vs. Spirent Communications plc | BLUESCOPE STEEL vs. Verizon Communications | BLUESCOPE STEEL vs. Charter Communications | BLUESCOPE STEEL vs. Entravision Communications |
| Boiron SA vs. Pfizer Inc | Boiron SA vs. Superior Plus Corp | Boiron SA vs. Origin Agritech | Boiron SA vs. Identiv |
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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