Correlation Between Saferoads Holdings and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Saferoads Holdings 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 Saferoads Holdings and Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saferoads Holdings and Bluescope Steel, you can compare the effects of market volatilities on Saferoads Holdings 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 Saferoads Holdings with a short position of Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saferoads Holdings and Bluescope Steel.
Diversification Opportunities for Saferoads Holdings and Bluescope Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Saferoads and Bluescope is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Saferoads Holdings and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel and Saferoads Holdings 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 Saferoads Holdings 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 Saferoads Holdings i.e., Saferoads Holdings and Bluescope Steel go up and down completely randomly.
Pair Corralation between Saferoads Holdings and Bluescope Steel
Assuming the 90 days trading horizon Saferoads Holdings is expected to under-perform the Bluescope Steel. In addition to that, Saferoads Holdings is 1.42 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 -0.01 per unit of volatility. If you would invest 2,247 in Bluescope Steel on September 14, 2024 and sell it today you would lose (155.00) from holding Bluescope Steel or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saferoads Holdings vs. Bluescope Steel
Performance |
| Timeline |
| Saferoads Holdings |
| Bluescope Steel |
Saferoads Holdings and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saferoads Holdings and Bluescope Steel
The main advantage of trading using opposite Saferoads Holdings and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saferoads Holdings 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.| Saferoads Holdings vs. Energy Resources | Saferoads Holdings vs. 88 Energy | Saferoads Holdings vs. Amani Gold | Saferoads Holdings vs. A1 Investments Resources |
| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Sandfire Resources NL | Bluescope Steel vs. De Grey Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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