Correlation Between BLUESCOPE STEEL and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Infrastrutture Wireless 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 Infrastrutture Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on BLUESCOPE STEEL and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Infrastrutture Wireless.
Diversification Opportunities for BLUESCOPE STEEL and Infrastrutture Wireless
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BLUESCOPE and Infrastrutture is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Infrastrutture Wireless
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 2.14 times more return on investment than Infrastrutture Wireless. However, BLUESCOPE STEEL is 2.14 times more volatile than Infrastrutture Wireless Italiane. It trades about 0.05 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about -0.17 per unit of risk. If you would invest 1,304 in BLUESCOPE STEEL on December 11, 2024 and sell it today you would earn a total of 36.00 from holding BLUESCOPE STEEL or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Infrastrutture Wireless |
BLUESCOPE STEEL and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Infrastrutture Wireless
The main advantage of trading using opposite BLUESCOPE STEEL and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| BLUESCOPE STEEL vs. New Residential Investment | BLUESCOPE STEEL vs. Charter Communications | BLUESCOPE STEEL vs. Scottish Mortgage Investment | BLUESCOPE STEEL vs. Singapore Telecommunications Limited |
| Infrastrutture Wireless vs. Vinci S A | Infrastrutture Wireless vs. Johnson Controls International | Infrastrutture Wireless vs. Larsen Toubro Limited | Infrastrutture Wireless vs. China Railway Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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