Correlation Between BLUESCOPE STEEL and Seino Holdings
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and Seino Holdings 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 Seino Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Seino Holdings Co, you can compare the effects of market volatilities on BLUESCOPE STEEL and Seino Holdings 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 Seino Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Seino Holdings.
Diversification Opportunities for BLUESCOPE STEEL and Seino Holdings
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BLUESCOPE and Seino is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and Seino Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seino Holdings 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 Seino Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seino Holdings has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Seino Holdings go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Seino Holdings
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 2.28 times less return on investment than Seino Holdings. But when comparing it to its historical volatility, BLUESCOPE STEEL is 1.06 times less risky than Seino Holdings. It trades about 0.03 of its potential returns per unit of risk. Seino Holdings Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 810.00 in Seino Holdings Co on September 3, 2024 and sell it today you would earn a total of 720.00 from holding Seino Holdings Co or generate 88.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Seino Holdings Co
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Seino Holdings |
BLUESCOPE STEEL and Seino Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Seino Holdings
The main advantage of trading using opposite BLUESCOPE STEEL and Seino Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, Seino Holdings 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 Seino Holdings will offset losses from the drop in Seino Holdings' long position.| BLUESCOPE STEEL vs. Chongqing Machinery Electric | BLUESCOPE STEEL vs. BRIT AMER TOBACCO | BLUESCOPE STEEL vs. The Hanover Insurance | BLUESCOPE STEEL vs. INSURANCE AUST GRP |
| Seino Holdings vs. BLUESCOPE STEEL | Seino Holdings vs. CECO ENVIRONMENTAL | Seino Holdings vs. Tianjin Capital Environmental | Seino Holdings vs. Sims Metal Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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