Correlation Between Bunzl Plc and PT Steel

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and PT 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 Bunzl Plc and PT Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and PT Steel Pipe, you can compare the effects of market volatilities on Bunzl Plc and PT 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 Bunzl Plc with a short position of PT Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and PT Steel.

Diversification Opportunities for Bunzl Plc and PT Steel

BunzlS08Diversified AwayBunzlS08Diversified Away100%
0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bunzl and S08 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and PT Steel Pipe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Steel Pipe and Bunzl Plc 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 Bunzl plc are associated (or correlated) with PT Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Steel Pipe has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and PT Steel go up and down completely randomly.

Pair Corralation between Bunzl Plc and PT Steel

Assuming the 90 days trading horizon Bunzl plc is expected to generate 0.26 times more return on investment than PT Steel. However, Bunzl plc is 3.81 times less risky than PT Steel. It trades about -0.06 of its potential returns per unit of risk. PT Steel Pipe is currently generating about -0.05 per unit of risk. If you would invest  4,253  in Bunzl plc on October 20, 2024 and sell it today you would lose (209.00) from holding Bunzl plc or give up 4.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.36%
ValuesDaily Returns

Bunzl plc  vs.  PT Steel Pipe

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-505
JavaScript chart by amCharts 3.21.15BUZ1 S08
       Timeline  
Bunzl plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bunzl plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bunzl Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan394041424344
PT Steel Pipe 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Steel Pipe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.0110.01150.0120.01250.0130.01350.0140.0145

Bunzl Plc and PT Steel Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.08-3.08-2.08-1.07-0.06810.941.942.943.954.95 0.050.100.150.20
JavaScript chart by amCharts 3.21.15BUZ1 S08
       Returns  

Pair Trading with Bunzl Plc and PT Steel

The main advantage of trading using opposite Bunzl Plc and PT Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, PT 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 PT Steel will offset losses from the drop in PT Steel's long position.
The idea behind Bunzl plc and PT Steel Pipe 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities