Correlation Between BlueScope Steel and Nucor Corp
Can any of the company-specific risk be diversified away by investing in both BlueScope Steel and Nucor Corp 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 Nucor Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueScope Steel Ltd and Nucor Corp, you can compare the effects of market volatilities on BlueScope Steel and Nucor Corp 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 Nucor Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and Nucor Corp.
Diversification Opportunities for BlueScope Steel and Nucor Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlueScope and Nucor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Ltd and Nucor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor Corp 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 Ltd are associated (or correlated) with Nucor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor Corp has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and Nucor Corp go up and down completely randomly.
Pair Corralation between BlueScope Steel and Nucor Corp
Assuming the 90 days horizon BlueScope Steel Ltd is expected to generate 1.33 times more return on investment than Nucor Corp. However, BlueScope Steel is 1.33 times more volatile than Nucor Corp. It trades about 0.02 of its potential returns per unit of risk. Nucor Corp is currently generating about 0.02 per unit of risk. If you would invest 6,080 in BlueScope Steel Ltd on September 2, 2024 and sell it today you would earn a total of 774.00 from holding BlueScope Steel Ltd or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
BlueScope Steel Ltd vs. Nucor Corp
Performance |
| Timeline |
| BlueScope Steel |
| Nucor Corp |
BlueScope Steel and Nucor Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueScope Steel and Nucor Corp
The main advantage of trading using opposite BlueScope Steel and Nucor Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel position performs unexpectedly, Nucor Corp 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 Nucor Corp will offset losses from the drop in Nucor Corp's long position.| BlueScope Steel vs. Aperam PK | BlueScope Steel vs. Acerinox SA ADR | BlueScope Steel vs. Algoma Steel Group | BlueScope Steel vs. Synalloy |
| Nucor Corp vs. United States Steel | Nucor Corp vs. Reliance Steel Aluminum | Nucor Corp vs. ArcelorMittal SA ADR | Nucor Corp vs. Commercial Metals |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |