Correlation Between Bisalloy Steel and Balkan Mining
Can any of the company-specific risk be diversified away by investing in both Bisalloy Steel and Balkan Mining 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 Balkan Mining 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 Balkan Mining and, you can compare the effects of market volatilities on Bisalloy Steel and Balkan Mining 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 Balkan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisalloy Steel and Balkan Mining.
Diversification Opportunities for Bisalloy Steel and Balkan Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bisalloy and Balkan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bisalloy Steel Group and Balkan Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balkan Mining 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 Balkan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balkan Mining has no effect on the direction of Bisalloy Steel i.e., Bisalloy Steel and Balkan Mining go up and down completely randomly.
Pair Corralation between Bisalloy Steel and Balkan Mining
Assuming the 90 days trading horizon Bisalloy Steel Group is expected to generate 0.56 times more return on investment than Balkan Mining. However, Bisalloy Steel Group is 1.8 times less risky than Balkan Mining. It trades about 0.05 of its potential returns per unit of risk. Balkan Mining and is currently generating about -0.09 per unit of risk. If you would invest 313.00 in Bisalloy Steel Group on December 24, 2024 and sell it today you would earn a total of 6.00 from holding Bisalloy Steel Group or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bisalloy Steel Group vs. Balkan Mining and
Performance |
| Timeline |
| Bisalloy Steel Group |
| Balkan Mining |
Bisalloy Steel and Balkan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisalloy Steel and Balkan Mining
The main advantage of trading using opposite Bisalloy Steel and Balkan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisalloy Steel position performs unexpectedly, Balkan Mining 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 Balkan Mining will offset losses from the drop in Balkan Mining's long position.| Bisalloy Steel vs. Spirit Telecom | Bisalloy Steel vs. Vulcan Steel | Bisalloy Steel vs. Ironbark Capital | Bisalloy Steel vs. Microequities Asset Management |
| Balkan Mining vs. Flagship Investments | Balkan Mining vs. Australian Strategic Materials | Balkan Mining vs. Djerriwarrh Investments | Balkan Mining vs. Dug Technology |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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