Correlation Between Singular Health and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Singular Health 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 Singular Health and Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singular Health Group and Bluescope Steel, you can compare the effects of market volatilities on Singular Health 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 Singular Health with a short position of Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singular Health and Bluescope Steel.
Diversification Opportunities for Singular Health and Bluescope Steel
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singular and Bluescope is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Singular Health Group and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel and Singular Health 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 Singular Health Group 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 Singular Health i.e., Singular Health and Bluescope Steel go up and down completely randomly.
Pair Corralation between Singular Health and Bluescope Steel
Assuming the 90 days trading horizon Singular Health is expected to generate 1.24 times less return on investment than Bluescope Steel. In addition to that, Singular Health is 1.89 times more volatile than Bluescope Steel. It trades about 0.12 of its total potential returns per unit of risk. Bluescope Steel is currently generating about 0.29 per unit of volatility. If you would invest 2,033 in Bluescope Steel on November 28, 2024 and sell it today you would earn a total of 380.00 from holding Bluescope Steel or generate 18.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singular Health Group vs. Bluescope Steel
Performance |
| Timeline |
| Singular Health Group |
| Bluescope Steel |
Singular Health and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singular Health and Bluescope Steel
The main advantage of trading using opposite Singular Health and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singular Health 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.| Singular Health vs. Dalaroo Metals | Singular Health vs. Black Rock Mining | Singular Health vs. 29Metals | Singular Health vs. Olympio Metals |
| Bluescope Steel vs. Fisher Paykel Healthcare | Bluescope Steel vs. Autosports Group | Bluescope Steel vs. Aristocrat Leisure | Bluescope Steel vs. Sports Entertainment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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