Correlation Between Bisalloy Steel and Brambles

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

By analyzing existing cross correlation between Bisalloy Steel Group and Brambles, you can compare the effects of market volatilities on Bisalloy Steel and Brambles 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 Bisalloy Steel with a short position of Brambles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisalloy Steel and Brambles.

Diversification Opportunities for Bisalloy Steel and Brambles

-0.59

Correlation Coefficient

Bisalloy Steel  Brambles

Excellent diversification

The 3 months correlation between Bisalloy and Brambles is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bisalloy Steel Group and Brambles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles and Bisalloy 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 Bisalloy Steel Group are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles has no effect on the direction of Bisalloy Steel i.e., Bisalloy Steel and Brambles go up and down completely randomly.

Pair Corralation between Bisalloy Steel and Brambles

Assuming the 90 days trading horizon Bisalloy Steel Group is expected to generate 2.73 times more return on investment than Brambles. However, Bisalloy Steel is 2.73 times more volatile than Brambles. It trades about 0.04 of its potential returns per unit of risk. Brambles is currently generating about 0.11 per unit of risk. If you would invest  239.00  in Bisalloy Steel Group on December 7, 2024 and sell it today you would earn a total of  83.00  from holding Bisalloy Steel Group or generate 34.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bisalloy Steel Group  vs.  Brambles

Bisalloy Steel Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bisalloy Steel Group 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Brambles

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brambles are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Brambles may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bisalloy Steel and Brambles

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

The idea behind Bisalloy Steel Group and Brambles 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.