Correlation Between Duketon Mining and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Duketon Mining and Bluescope Steel 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 Duketon Mining and Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duketon Mining and Bluescope Steel, you can compare the effects of market volatilities on Duketon Mining and Bluescope Steel 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 Duketon Mining with a short position of Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duketon Mining and Bluescope Steel.
Diversification Opportunities for Duketon Mining and Bluescope Steel
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duketon and Bluescope is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Duketon Mining and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel and Duketon Mining 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 Duketon Mining are associated (or correlated) with Bluescope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluescope Steel has no effect on the direction of Duketon Mining i.e., Duketon Mining and Bluescope Steel go up and down completely randomly.
Pair Corralation between Duketon Mining and Bluescope Steel
Assuming the 90 days trading horizon Duketon Mining is expected to under-perform the Bluescope Steel. In addition to that, Duketon Mining is 2.57 times more volatile than Bluescope Steel. It trades about -0.34 of its total potential returns per unit of risk. Bluescope Steel is currently generating about -0.14 per unit of volatility. If you would invest 2,000 in Bluescope Steel on October 15, 2024 and sell it today you would lose (63.00) from holding Bluescope Steel or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duketon Mining vs. Bluescope Steel
Performance |
| Timeline |
| Duketon Mining |
| Bluescope Steel |
Duketon Mining and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duketon Mining and Bluescope Steel
The main advantage of trading using opposite Duketon Mining and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duketon Mining position performs unexpectedly, Bluescope Steel 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 Bluescope Steel will offset losses from the drop in Bluescope Steel's long position.| Duketon Mining vs. DY6 Metals | Duketon Mining vs. Dalaroo Metals | Duketon Mining vs. Queste Communications | Duketon Mining vs. Sky Metals |
| Bluescope Steel vs. Kalgoorlie Gold Mining | Bluescope Steel vs. Duketon Mining | Bluescope Steel vs. Truscott Mining Corp | Bluescope Steel vs. Andean Silver 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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