Correlation Between Bluescope Steel and Tombador Iron
Can any of the company-specific risk be diversified away by investing in both Bluescope Steel and Tombador Iron 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 Bluescope Steel and Tombador Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluescope Steel and Tombador Iron, you can compare the effects of market volatilities on Bluescope Steel and Tombador Iron 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 Bluescope Steel with a short position of Tombador Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluescope Steel and Tombador Iron.
Diversification Opportunities for Bluescope Steel and Tombador Iron
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bluescope and Tombador is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bluescope Steel and Tombador Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tombador Iron and Bluescope 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 Bluescope Steel are associated (or correlated) with Tombador Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tombador Iron has no effect on the direction of Bluescope Steel i.e., Bluescope Steel and Tombador Iron go up and down completely randomly.
Pair Corralation between Bluescope Steel and Tombador Iron
If you would invest 1,976 in Bluescope Steel on July 9, 2024 and sell it today you would earn a total of 226.00 from holding Bluescope Steel or generate 11.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bluescope Steel vs. Tombador Iron
Performance |
Timeline |
Bluescope Steel |
Tombador Iron |
Bluescope Steel and Tombador Iron Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bluescope Steel and Tombador Iron
The main advantage of trading using opposite Bluescope Steel and Tombador Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluescope Steel position performs unexpectedly, Tombador Iron 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 Tombador Iron will offset losses from the drop in Tombador Iron's long position.Bluescope Steel vs. Queste Communications | Bluescope Steel vs. Collins Foods | Bluescope Steel vs. Carnegie Clean Energy | Bluescope Steel vs. Autosports Group |
Tombador Iron vs. Bluescope Steel | Tombador Iron vs. Aneka Tambang Tbk | Tombador Iron vs. Sandfire Resources NL |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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