Correlation Between Bluescope Steel and Ampol
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Ampol 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 Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Ampol, you can compare the effects of market volatilities on Bluescope Steel and Ampol 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 Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Ampol.
Diversification Opportunities for Bluescope Steel and Ampol
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bluescope and Ampol is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol 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 Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Ampol go up and down completely randomly.
Pair Corralation between Bluescope Steel and Ampol
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 1.13 times more return on investment than Ampol. However, Bluescope Steel is 1.13 times more volatile than Ampol. It trades about -0.01 of its potential returns per unit of risk. Ampol is currently generating about -0.06 per unit of risk. If you would invest 2,182 in Bluescope Steel on September 13, 2024 and sell it today you would lose (20.00) from holding Bluescope Steel or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Ampol
Performance |
| Timeline |
| Bluescope Steel |
| Ampol |
Bluescope Steel and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Ampol
The main advantage of trading using opposite Bluescope Steel and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Bluescope Steel vs. My Foodie Box | Bluescope Steel vs. Retail Food Group | Bluescope Steel vs. Perseus Mining | Bluescope Steel vs. Autosports Group |
| Ampol vs. Strickland Metals | Ampol vs. Dalaroo Metals | Ampol vs. Patriot Battery Metals | Ampol vs. Group 6 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |