Correlation Between Vastned Retail and BLUESCOPE STEEL
Can any of the company-specific risk be diversified away by investing in both Vastned Retail 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 Vastned Retail and BLUESCOPE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and BLUESCOPE STEEL, you can compare the effects of market volatilities on Vastned Retail 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 Vastned Retail with a short position of BLUESCOPE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and BLUESCOPE STEEL.
Diversification Opportunities for Vastned Retail and BLUESCOPE STEEL
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vastned and BLUESCOPE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and BLUESCOPE STEEL go up and down completely randomly.
Pair Corralation between Vastned Retail and BLUESCOPE STEEL
Assuming the 90 days horizon Vastned Retail NV is expected to generate 0.7 times more return on investment than BLUESCOPE STEEL. However, Vastned Retail NV is 1.43 times less risky than BLUESCOPE STEEL. It trades about 0.07 of its potential returns per unit of risk. BLUESCOPE STEEL is currently generating about 0.03 per unit of risk. If you would invest 1,791 in Vastned Retail NV on September 2, 2024 and sell it today you would earn a total of 649.00 from holding Vastned Retail NV or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. BLUESCOPE STEEL
Performance |
| Timeline |
| Vastned Retail NV |
| BLUESCOPE STEEL |
Vastned Retail and BLUESCOPE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and BLUESCOPE STEEL
The main advantage of trading using opposite Vastned Retail and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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.| Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings | Vastned Retail vs. Origin Agritech | Vastned Retail vs. SIVERS SEMICONDUCTORS AB |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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