Correlation Between SCHNITZER STEEL and BlueScope Steel

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Can any of the company-specific risk be diversified away by investing in both SCHNITZER STEEL 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 SCHNITZER STEEL and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCHNITZER STEEL INDUSTRIES and BlueScope Steel Ltd, you can compare the effects of market volatilities on SCHNITZER STEEL 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 SCHNITZER STEEL with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHNITZER STEEL and BlueScope Steel.

Diversification Opportunities for SCHNITZER STEEL and BlueScope Steel

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SCHNITZER and BlueScope is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SCHNITZER STEEL INDUSTRIES and BlueScope Steel Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and SCHNITZER 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 SCHNITZER STEEL INDUSTRIES 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 SCHNITZER STEEL i.e., SCHNITZER STEEL and BlueScope Steel go up and down completely randomly.

Pair Corralation between SCHNITZER STEEL and BlueScope Steel

If you would invest  5,774  in BlueScope Steel Ltd on November 9, 2024 and sell it today you would earn a total of  878.00  from holding BlueScope Steel Ltd or generate 15.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

SCHNITZER STEEL INDUSTRIES  vs.  BlueScope Steel Ltd

 Performance 
       Timeline  
SCHNITZER STEEL INDU 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SCHNITZER STEEL INDUSTRIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, SCHNITZER STEEL is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
BlueScope Steel 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days BlueScope Steel Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SCHNITZER STEEL and BlueScope Steel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SCHNITZER STEEL and BlueScope Steel

The main advantage of trading using opposite SCHNITZER STEEL and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHNITZER STEEL 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.
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The idea behind SCHNITZER STEEL INDUSTRIES and BlueScope Steel Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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