Correlation Between Bluescope Steel and Enegex NL
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Enegex NL 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 Enegex NL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Enegex NL, you can compare the effects of market volatilities on Bluescope Steel and Enegex NL 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 Enegex NL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Enegex NL.
Diversification Opportunities for Bluescope Steel and Enegex NL
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bluescope and Enegex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Enegex NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enegex NL 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 Enegex NL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enegex NL has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Enegex NL go up and down completely randomly.
Pair Corralation between Bluescope Steel and Enegex NL
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.42 times more return on investment than Enegex NL. However, Bluescope Steel is 2.36 times less risky than Enegex NL. It trades about 0.04 of its potential returns per unit of risk. Enegex NL is currently generating about -0.06 per unit of risk. If you would invest 1,992 in Bluescope Steel on September 13, 2024 and sell it today you would earn a total of 170.00 from holding Bluescope Steel or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Enegex NL
Performance |
| Timeline |
| Bluescope Steel |
| Enegex NL |
Bluescope Steel and Enegex NL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Enegex NL
The main advantage of trading using opposite Bluescope Steel and Enegex NL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Enegex NL 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 Enegex NL will offset losses from the drop in Enegex NL'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 |
| Enegex NL vs. Westpac Banking | Enegex NL vs. ABACUS STORAGE KING | Enegex NL vs. Odyssey Energy | Enegex NL vs. Sims |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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