Correlation Between Bisalloy Steel and Appen
Can any of the company-specific risk be diversified away by investing in both Bisalloy Steel and Appen 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 Bisalloy Steel and Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bisalloy Steel Group and Appen, you can compare the effects of market volatilities on Bisalloy Steel and Appen 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 Bisalloy Steel with a short position of Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisalloy Steel and Appen.
Diversification Opportunities for Bisalloy Steel and Appen
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bisalloy and Appen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bisalloy Steel Group and Appen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen and Bisalloy 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 Bisalloy Steel Group are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen has no effect on the direction of Bisalloy Steel i.e., Bisalloy Steel and Appen go up and down completely randomly.
Pair Corralation between Bisalloy Steel and Appen
Assuming the 90 days trading horizon Bisalloy Steel Group is expected to generate 0.5 times more return on investment than Appen. However, Bisalloy Steel Group is 2.0 times less risky than Appen. It trades about 0.39 of its potential returns per unit of risk. Appen is currently generating about -0.08 per unit of risk. If you would invest 345.00 in Bisalloy Steel Group on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Bisalloy Steel Group or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bisalloy Steel Group vs. Appen
Performance |
| Timeline |
| Bisalloy Steel Group |
| Appen |
Bisalloy Steel and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisalloy Steel and Appen
The main advantage of trading using opposite Bisalloy Steel and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisalloy Steel position performs unexpectedly, Appen 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 Appen will offset losses from the drop in Appen's long position.| Bisalloy Steel vs. Australian Unity Office | Bisalloy Steel vs. EROAD | Bisalloy Steel vs. Stelar Metals | Bisalloy Steel vs. Home Consortium |
| Appen vs. WiseTech Global Limited | Appen vs. Farm Pride Foods | Appen vs. MetalsGrove Mining | Appen vs. Black Rock Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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