Correlation Between TRADEDOUBLER and BLUESCOPE STEEL

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

By analyzing existing cross correlation between TRADEDOUBLER AB SK and BLUESCOPE STEEL, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of BLUESCOPE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and BLUESCOPE STEEL.

Diversification Opportunities for TRADEDOUBLER and BLUESCOPE STEEL

-0.04

Correlation Coefficient

TRADEDOUBLER  BLUESCOPE STEEL

Good diversification

The 3 months correlation between TRADEDOUBLER and BLUESCOPE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and BLUESCOPE STEEL go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and BLUESCOPE STEEL

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to under-perform the BLUESCOPE STEEL. In addition to that, TRADEDOUBLER is 1.81 times more volatile than BLUESCOPE STEEL. It trades about -0.02 of its total potential returns per unit of risk. BLUESCOPE STEEL is currently generating about -0.01 per unit of volatility. If you would invest  1,190  in BLUESCOPE STEEL on October 4, 2024 and sell it today you would lose (80.00) from holding BLUESCOPE STEEL or give up 6.72% of portfolio value over 90 days.

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

TRADEDOUBLER AB SK  vs.  BLUESCOPE STEEL

TRADEDOUBLER AB SK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BLUESCOPE STEEL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TRADEDOUBLER and BLUESCOPE STEEL

The main advantage of trading using opposite TRADEDOUBLER and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.

The idea behind TRADEDOUBLER AB SK and BLUESCOPE STEEL 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.