Correlation Between PICKN PAY and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and BlueScope Steel Limited, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and BlueScope Steel.
Diversification Opportunities for PICKN PAY and BlueScope Steel
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PICKN and BlueScope is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and BlueScope Steel go up and down completely randomly.
Pair Corralation between PICKN PAY and BlueScope Steel
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the BlueScope Steel. In addition to that, PICKN PAY is 1.12 times more volatile than BlueScope Steel Limited. It trades about -0.05 of its total potential returns per unit of risk. BlueScope Steel Limited is currently generating about 0.11 per unit of volatility. If you would invest 1,116 in BlueScope Steel Limited on December 30, 2024 and sell it today you would earn a total of 184.00 from holding BlueScope Steel Limited or generate 16.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PICKN PAY STORES vs. BlueScope Steel Limited
Performance |
Timeline |
PICKN PAY STORES |
BlueScope Steel |
PICKN PAY and BlueScope Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PICKN PAY and BlueScope Steel
The main advantage of trading using opposite PICKN PAY and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.PICKN PAY vs. Tradegate AG Wertpapierhandelsbank | PICKN PAY vs. BJs Wholesale Club | PICKN PAY vs. RETAIL FOOD GROUP | PICKN PAY vs. SUN ART RETAIL |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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