Correlation Between Bluescope Steel and Bellevue Gold
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Bellevue Gold 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 Bellevue Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Bellevue Gold, you can compare the effects of market volatilities on Bluescope Steel and Bellevue Gold 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 Bellevue Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Bellevue Gold.
Diversification Opportunities for Bluescope Steel and Bellevue Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bluescope and Bellevue is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Bellevue Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Gold 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 Bellevue Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Gold has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Bellevue Gold go up and down completely randomly.
Pair Corralation between Bluescope Steel and Bellevue Gold
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.29 times more return on investment than Bellevue Gold. However, Bluescope Steel is 3.44 times less risky than Bellevue Gold. It trades about 0.46 of its potential returns per unit of risk. Bellevue Gold is currently generating about 0.12 per unit of risk. If you would invest 1,884 in Bluescope Steel on November 3, 2024 and sell it today you would earn a total of 245.00 from holding Bluescope Steel or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Bellevue Gold
Performance |
| Timeline |
| Bluescope Steel |
| Bellevue Gold |
Bluescope Steel and Bellevue Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Bellevue Gold
The main advantage of trading using opposite Bluescope Steel and Bellevue Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Bellevue Gold 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 Bellevue Gold will offset losses from the drop in Bellevue Gold's long position.| Bluescope Steel vs. Platinum Asia Investments | Bluescope Steel vs. M3 Mining | Bluescope Steel vs. Duketon Mining | Bluescope Steel vs. Hotel Property Investments |
| Bellevue Gold vs. Hutchison Telecommunications | Bellevue Gold vs. ACDC Metals | Bellevue Gold vs. Falcon Metals | Bellevue Gold vs. Cleanaway Waste Management |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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