Correlation Between Strategic Education and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both Strategic Education 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 Strategic Education and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and BlueScope Steel Limited, you can compare the effects of market volatilities on Strategic Education 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 Strategic Education with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and BlueScope Steel.
Diversification Opportunities for Strategic Education and BlueScope Steel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Strategic and BlueScope is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and Strategic Education 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 Strategic Education 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 Strategic Education i.e., Strategic Education and BlueScope Steel go up and down completely randomly.
Pair Corralation between Strategic Education and BlueScope Steel
Assuming the 90 days horizon Strategic Education is expected to generate 0.61 times more return on investment than BlueScope Steel. However, Strategic Education is 1.65 times less risky than BlueScope Steel. It trades about -0.01 of its potential returns per unit of risk. BlueScope Steel Limited is currently generating about -0.04 per unit of risk. If you would invest 9,240 in Strategic Education on September 12, 2024 and sell it today you would lose (40.00) from holding Strategic Education or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Education vs. BlueScope Steel Limited
Performance |
| Timeline |
| Strategic Education |
| BlueScope Steel |
Strategic Education and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and BlueScope Steel
The main advantage of trading using opposite Strategic Education and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education 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.| Strategic Education vs. IDP EDUCATION LTD | Strategic Education vs. Laureate Education | Strategic Education vs. Superior Plus Corp | Strategic Education vs. SIVERS SEMICONDUCTORS AB |
| BlueScope Steel vs. COSMOSTEEL HLDGS | BlueScope Steel vs. Tyson Foods | BlueScope Steel vs. Daido Steel Co | BlueScope Steel vs. Tianjin Capital Environmental |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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