Correlation Between KENEDIX OFFICE and BLUESCOPE STEEL
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and BLUESCOPE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and BLUESCOPE STEEL, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of BLUESCOPE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and BLUESCOPE STEEL.
Diversification Opportunities for KENEDIX OFFICE and BLUESCOPE STEEL
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KENEDIX and BLUESCOPE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and BLUESCOPE STEEL go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and BLUESCOPE STEEL
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.36 times more return on investment than BLUESCOPE STEEL. However, KENEDIX OFFICE INV is 2.8 times less risky than BLUESCOPE STEEL. It trades about -0.17 of its potential returns per unit of risk. BLUESCOPE STEEL is currently generating about -0.23 per unit of risk. If you would invest 91,000 in KENEDIX OFFICE INV on September 23, 2024 and sell it today you would lose (3,000) from holding KENEDIX OFFICE INV or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. BLUESCOPE STEEL
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| BLUESCOPE STEEL |
KENEDIX OFFICE and BLUESCOPE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and BLUESCOPE STEEL
The main advantage of trading using opposite KENEDIX OFFICE and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc | BLUESCOPE STEEL vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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