Correlation Between BlueScope Steel and Fielmann Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both BlueScope Steel and Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlueScope Steel Limited and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on BlueScope Steel and Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and Fielmann Aktiengesellscha.

Diversification Opportunities for BlueScope Steel and Fielmann Aktiengesellscha

-0.12

Correlation Coefficient

BlueScope Steel  Fielmann Aktiengesellscha

Good diversification

The 3 months correlation between BlueScope and Fielmann is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Limited and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha 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 Limited are associated (or correlated) with Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between BlueScope Steel and Fielmann Aktiengesellscha

Assuming the 90 days horizon BlueScope Steel Limited is expected to under-perform the Fielmann Aktiengesellscha. In addition to that, BlueScope Steel is 1.79 times more volatile than Fielmann Aktiengesellschaft. It trades about -0.1 of its total potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.06 per unit of volatility. If you would invest  4,105  in Fielmann Aktiengesellschaft on September 19, 2024 and sell it today you would lose (85.00) from holding Fielmann Aktiengesellschaft or give up 2.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

BlueScope Steel Limited  vs.  Fielmann Aktiengesellschaft

BlueScope Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlueScope Steel Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BlueScope Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BlueScope Steel and Fielmann Aktiengesellscha

The main advantage of trading using opposite BlueScope Steel and Fielmann Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel position performs unexpectedly, Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha will offset losses from the drop in Fielmann Aktiengesellscha's long position.

The idea behind BlueScope Steel Limited and Fielmann Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.