Correlation Between BLUESCOPE STEEL and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Liechtensteinische 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 Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Liechtensteinische Landesbank Aktiengesellschaft, you can compare the effects of market volatilities on BLUESCOPE STEEL and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Liechtensteinische.
Diversification Opportunities for BLUESCOPE STEEL and Liechtensteinische
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between BLUESCOPE and Liechtensteinische is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Liechtensteinische go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Liechtensteinische
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to under-perform the Liechtensteinische. In addition to that, BLUESCOPE STEEL is 1.87 times more volatile than Liechtensteinische Landesbank Aktiengesellschaft. It trades about -0.04 of its total potential returns per unit of risk. Liechtensteinische Landesbank Aktiengesellschaft is currently generating about -0.04 per unit of volatility. If you would invest 7,500 in Liechtensteinische Landesbank Aktiengesellschaft on September 14, 2024 and sell it today you would lose (100.00) from holding Liechtensteinische Landesbank Aktiengesellschaft or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Liechtensteinische |
BLUESCOPE STEEL and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Liechtensteinische
The main advantage of trading using opposite BLUESCOPE STEEL and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.| BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc |
| Liechtensteinische vs. Charter Communications | Liechtensteinische vs. INTERSHOP Communications Aktiengesellschaft | Liechtensteinische vs. CDN IMPERIAL BANK | Liechtensteinische vs. Commonwealth Bank of |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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