Correlation Between Bluescope Steel and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Chalice Mining 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 Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Chalice Mining Limited, you can compare the effects of market volatilities on Bluescope Steel and Chalice Mining 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 Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Chalice Mining.
Diversification Opportunities for Bluescope Steel and Chalice Mining
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bluescope and Chalice is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Chalice Mining go up and down completely randomly.
Pair Corralation between Bluescope Steel and Chalice Mining
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.37 times more return on investment than Chalice Mining. However, Bluescope Steel is 2.73 times less risky than Chalice Mining. It trades about 0.04 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.04 per unit of risk. If you would invest 1,698 in Bluescope Steel on September 3, 2024 and sell it today you would earn a total of 515.00 from holding Bluescope Steel or generate 30.33% 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. Chalice Mining Limited
Performance |
| Timeline |
| Bluescope Steel |
| Chalice Mining |
Bluescope Steel and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Chalice Mining
The main advantage of trading using opposite Bluescope Steel and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Chalice Mining 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Aneka Tambang Tbk |
| Chalice Mining vs. Northern Star Resources | Chalice Mining vs. Evolution Mining | Chalice Mining vs. Bluescope Steel | Chalice Mining vs. Aneka Tambang Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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