Correlation Between Bluescope Steel and First Graphene
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and First Graphene 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 First Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and First Graphene, you can compare the effects of market volatilities on Bluescope Steel and First Graphene 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 First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and First Graphene.
Diversification Opportunities for Bluescope Steel and First Graphene
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bluescope and First is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and First Graphene go up and down completely randomly.
Pair Corralation between Bluescope Steel and First Graphene
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.6 times more return on investment than First Graphene. However, Bluescope Steel is 1.65 times less risky than First Graphene. It trades about 0.14 of its potential returns per unit of risk. First Graphene is currently generating about -0.31 per unit of risk. If you would invest 2,060 in Bluescope Steel on September 5, 2024 and sell it today you would earn a total of 153.00 from holding Bluescope Steel or generate 7.43% 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. First Graphene
Performance |
| Timeline |
| Bluescope Steel |
| First Graphene |
Bluescope Steel and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and First Graphene
The main advantage of trading using opposite Bluescope Steel and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, First Graphene 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 First Graphene will offset losses from the drop in First Graphene's long position.| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Sandfire Resources NL | Bluescope Steel vs. Aneka Tambang Tbk |
| First Graphene vs. Autosports Group | First Graphene vs. Falcon Metals | First Graphene vs. Homeco Daily Needs | First Graphene vs. Carawine Resources Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |