Correlation Between Bluescope Steel and Australia
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Australia 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 Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Australia and New, you can compare the effects of market volatilities on Bluescope Steel and Australia 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 Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Australia.
Diversification Opportunities for Bluescope Steel and Australia
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bluescope and Australia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New 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 Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Australia go up and down completely randomly.
Pair Corralation between Bluescope Steel and Australia
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 2.29 times less return on investment than Australia. In addition to that, Bluescope Steel is 1.59 times more volatile than Australia and New. It trades about 0.02 of its total potential returns per unit of risk. Australia and New is currently generating about 0.08 per unit of volatility. If you would invest 2,725 in Australia and New on November 7, 2024 and sell it today you would earn a total of 288.00 from holding Australia and New or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Australia and New
Performance |
| Timeline |
| Bluescope Steel |
| Australia and New |
Bluescope Steel and Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Australia
The main advantage of trading using opposite Bluescope Steel and Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Australia 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 Australia will offset losses from the drop in Australia's long position.| Bluescope Steel vs. Neurotech International | Bluescope Steel vs. Complii FinTech Solutions | Bluescope Steel vs. Iron Road | Bluescope Steel vs. Readytech Holdings |
| Australia vs. Computershare | Australia vs. Healthco Healthcare and | Australia vs. Carawine Resources Limited | Australia vs. Apiam Animal Health |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |