Correlation Between Bluescope Steel and Bisalloy Steel
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Bisalloy Steel 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 Bisalloy Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Bisalloy Steel Group, you can compare the effects of market volatilities on Bluescope Steel and Bisalloy Steel 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 Bisalloy Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Bisalloy Steel.
Diversification Opportunities for Bluescope Steel and Bisalloy Steel
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bluescope and Bisalloy is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Bisalloy Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisalloy Steel Group 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 Bisalloy Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisalloy Steel Group has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Bisalloy Steel go up and down completely randomly.
Pair Corralation between Bluescope Steel and Bisalloy Steel
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.32 times more return on investment than Bisalloy Steel. However, Bluescope Steel is 3.08 times less risky than Bisalloy Steel. It trades about 0.47 of its potential returns per unit of risk. Bisalloy Steel Group is currently generating about -0.13 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Bisalloy Steel Group
Performance |
| Timeline |
| Bluescope Steel |
| Bisalloy Steel Group |
Bluescope Steel and Bisalloy Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Bisalloy Steel
The main advantage of trading using opposite Bluescope Steel and Bisalloy Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Bisalloy Steel 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 Bisalloy Steel will offset losses from the drop in Bisalloy Steel's long position.| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Sandfire Resources NL | Bluescope Steel vs. Aneka Tambang Tbk |
| Bisalloy Steel vs. Ironbark Capital | Bisalloy Steel vs. Macquarie Technology Group | Bisalloy Steel vs. Bluescope Steel | Bisalloy Steel vs. Bailador Technology Invest |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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