Correlation Between Step One and Bisalloy Steel
Can any of the company-specific risk be diversified away by investing in both Step One and Bisalloy 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 Step One and Bisalloy Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Bisalloy Steel Group, you can compare the effects of market volatilities on Step One and Bisalloy 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 Step One with a short position of Bisalloy Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Bisalloy Steel.
Diversification Opportunities for Step One and Bisalloy Steel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Step and Bisalloy is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Bisalloy Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisalloy Steel Group and Step One 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 Step One Clothing are associated (or correlated) with Bisalloy Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisalloy Steel Group has no effect on the direction of Step One i.e., Step One and Bisalloy Steel go up and down completely randomly.
Pair Corralation between Step One and Bisalloy Steel
Assuming the 90 days trading horizon Step One Clothing is expected to under-perform the Bisalloy Steel. In addition to that, Step One is 1.52 times more volatile than Bisalloy Steel Group. It trades about -0.09 of its total potential returns per unit of risk. Bisalloy Steel Group is currently generating about -0.04 per unit of volatility. If you would invest 370.00 in Bisalloy Steel Group on December 2, 2024 and sell it today you would lose (40.00) from holding Bisalloy Steel Group or give up 10.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Step One Clothing vs. Bisalloy Steel Group
Performance |
Timeline |
Step One Clothing |
Bisalloy Steel Group |
Step One and Bisalloy Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Step One and Bisalloy Steel
The main advantage of trading using opposite Step One and Bisalloy Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One position performs unexpectedly, Bisalloy 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 Bisalloy Steel will offset losses from the drop in Bisalloy Steel's long position.Step One vs. Retail Food Group | Step One vs. Super Retail Group | Step One vs. DMC Mining | Step One vs. Charter Hall Retail |
Bisalloy Steel vs. Catalyst Metals | Bisalloy Steel vs. Group 6 Metals | Bisalloy Steel vs. Truscott Mining Corp | Bisalloy Steel vs. Charter Hall Education |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |