Correlation Between Bisalloy Steel and ABACUS STORAGE
Can any of the company-specific risk be diversified away by investing in both Bisalloy Steel and ABACUS STORAGE 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 ABACUS STORAGE 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 ABACUS STORAGE KING, you can compare the effects of market volatilities on Bisalloy Steel and ABACUS STORAGE 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 ABACUS STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisalloy Steel and ABACUS STORAGE.
Diversification Opportunities for Bisalloy Steel and ABACUS STORAGE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bisalloy and ABACUS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bisalloy Steel Group and ABACUS STORAGE KING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABACUS STORAGE KING 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 ABACUS STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABACUS STORAGE KING has no effect on the direction of Bisalloy Steel i.e., Bisalloy Steel and ABACUS STORAGE go up and down completely randomly.
Pair Corralation between Bisalloy Steel and ABACUS STORAGE
Assuming the 90 days trading horizon Bisalloy Steel Group is expected to generate 4.69 times more return on investment than ABACUS STORAGE. However, Bisalloy Steel is 4.69 times more volatile than ABACUS STORAGE KING. It trades about 0.16 of its potential returns per unit of risk. ABACUS STORAGE KING is currently generating about -0.06 per unit of risk. If you would invest 319.00 in Bisalloy Steel Group on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Bisalloy Steel Group or generate 16.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bisalloy Steel Group vs. ABACUS STORAGE KING
Performance |
| Timeline |
| Bisalloy Steel Group |
| ABACUS STORAGE KING |
Bisalloy Steel and ABACUS STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisalloy Steel and ABACUS STORAGE
The main advantage of trading using opposite Bisalloy Steel and ABACUS STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisalloy Steel position performs unexpectedly, ABACUS STORAGE 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 ABACUS STORAGE will offset losses from the drop in ABACUS STORAGE's long position.| Bisalloy Steel vs. Northern Star Resources | Bisalloy Steel vs. Evolution Mining | Bisalloy Steel vs. Bluescope Steel | Bisalloy Steel vs. Sandfire Resources NL |
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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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