Correlation Between BLUESCOPE STEEL and Capital Counties
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Capital Counties 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 Capital Counties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Capital Counties Properties, you can compare the effects of market volatilities on BLUESCOPE STEEL and Capital Counties 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 Capital Counties. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Capital Counties.
Diversification Opportunities for BLUESCOPE STEEL and Capital Counties
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BLUESCOPE and Capital is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Capital Counties Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Counties Pro 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 Capital Counties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Counties Pro has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Capital Counties go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Capital Counties
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 1.6 times more return on investment than Capital Counties. However, BLUESCOPE STEEL is 1.6 times more volatile than Capital Counties Properties. It trades about 0.18 of its potential returns per unit of risk. Capital Counties Properties is currently generating about -0.09 per unit of risk. If you would invest 1,210 in BLUESCOPE STEEL on September 1, 2024 and sell it today you would earn a total of 140.00 from holding BLUESCOPE STEEL or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Capital Counties Properties
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Capital Counties Pro |
BLUESCOPE STEEL and Capital Counties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Capital Counties
The main advantage of trading using opposite BLUESCOPE STEEL and Capital Counties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Capital Counties 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 Capital Counties will offset losses from the drop in Capital Counties' long position.| BLUESCOPE STEEL vs. Mizuho Financial Group | BLUESCOPE STEEL vs. The Hanover Insurance | BLUESCOPE STEEL vs. Consolidated Communications Holdings | BLUESCOPE STEEL vs. Charter Communications |
| Capital Counties vs. MOLSON RS BEVERAGE | Capital Counties vs. Caltagirone SpA | Capital Counties vs. BLUESCOPE STEEL | Capital Counties vs. Thai Beverage Public |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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