Correlation Between Bluescope Steel and Pearl Gull
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Pearl Gull 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 Pearl Gull into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Pearl Gull Iron, you can compare the effects of market volatilities on Bluescope Steel and Pearl Gull 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 Pearl Gull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Pearl Gull.
Diversification Opportunities for Bluescope Steel and Pearl Gull
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bluescope and Pearl is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Pearl Gull Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pearl Gull Iron 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 Pearl Gull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pearl Gull Iron has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Pearl Gull go up and down completely randomly.
Pair Corralation between Bluescope Steel and Pearl Gull
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 0.53 times more return on investment than Pearl Gull. However, Bluescope Steel is 1.89 times less risky than Pearl Gull. It trades about 0.35 of its potential returns per unit of risk. Pearl Gull Iron is currently generating about 0.01 per unit of risk. If you would invest 1,899 in Bluescope Steel on November 7, 2024 and sell it today you would earn a total of 193.00 from holding Bluescope Steel or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Pearl Gull Iron
Performance |
| Timeline |
| Bluescope Steel |
| Pearl Gull Iron |
Bluescope Steel and Pearl Gull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Pearl Gull
The main advantage of trading using opposite Bluescope Steel and Pearl Gull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Pearl Gull 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 Pearl Gull will offset losses from the drop in Pearl Gull's long position.| Bluescope Steel vs. Neurotech International | Bluescope Steel vs. Complii FinTech Solutions | Bluescope Steel vs. Iron Road | Bluescope Steel vs. Readytech Holdings |
| Pearl Gull vs. Bell Financial Group | Pearl Gull vs. ARN Media Limited | Pearl Gull vs. Infomedia | Pearl Gull vs. Wt Financial Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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