Correlation Between Bluescope Steel and Superior Resources
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Superior Resources 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 Superior Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Superior Resources, you can compare the effects of market volatilities on Bluescope Steel and Superior Resources 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 Superior Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Superior Resources.
Diversification Opportunities for Bluescope Steel and Superior Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bluescope and Superior is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Resources 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 Superior Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Resources has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Superior Resources go up and down completely randomly.
Pair Corralation between Bluescope Steel and Superior Resources
Assuming the 90 days trading horizon Bluescope Steel is expected to generate 5.82 times less return on investment than Superior Resources. But when comparing it to its historical volatility, Bluescope Steel is 4.85 times less risky than Superior Resources. It trades about 0.04 of its potential returns per unit of risk. Superior Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Superior Resources on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Superior Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluescope Steel vs. Superior Resources
Performance |
| Timeline |
| Bluescope Steel |
| Superior Resources |
Bluescope Steel and Superior Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluescope Steel and Superior Resources
The main advantage of trading using opposite Bluescope Steel and Superior Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Superior Resources 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 Superior Resources will offset losses from the drop in Superior Resources' long position.| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Aneka Tambang Tbk |
| Superior Resources vs. G8 Education | Superior Resources vs. Capitol Health | Superior Resources vs. Dexus Convenience Retail | Superior Resources vs. Embark Education 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |