Correlation Between BLUESCOPE STEEL and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Treasury Wine 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 Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Treasury Wine Estates, you can compare the effects of market volatilities on BLUESCOPE STEEL and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Treasury Wine.
Diversification Opportunities for BLUESCOPE STEEL and Treasury Wine
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BLUESCOPE and Treasury is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Treasury Wine go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Treasury Wine
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 1.75 times more return on investment than Treasury Wine. However, BLUESCOPE STEEL is 1.75 times more volatile than Treasury Wine Estates. It trades about 0.15 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.04 per unit of risk. If you would invest 1,230 in BLUESCOPE STEEL on September 5, 2024 and sell it today you would earn a total of 120.00 from holding BLUESCOPE STEEL or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Treasury Wine Estates
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Treasury Wine Estates |
BLUESCOPE STEEL and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Treasury Wine
The main advantage of trading using opposite BLUESCOPE STEEL and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc |
| Treasury Wine vs. Vishay Intertechnology | Treasury Wine vs. Ultra Clean Holdings | Treasury Wine vs. Transport International Holdings | Treasury Wine vs. Casio Computer CoLtd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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