Correlation Between TRAVEL + and BLUESCOPE STEEL

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and BLUESCOPE STEEL, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of BLUESCOPE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and BLUESCOPE STEEL.

Diversification Opportunities for TRAVEL + and BLUESCOPE STEEL

0.0

Correlation Coefficient

TRAVEL +  BLUESCOPE STEEL

Pay attention - limited upside

The 3 months correlation between TRAVEL and BLUESCOPE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and BLUESCOPE STEEL go up and down completely randomly.

Pair Corralation between TRAVEL + and BLUESCOPE STEEL

If you would invest (100.00) in BLUESCOPE STEEL on December 22, 2024 and sell it today you would earn a total of  100.00  from holding BLUESCOPE STEEL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TRAVEL LEISURE DL 01  vs.  BLUESCOPE STEEL

TRAVEL LEISURE DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRAVEL LEISURE DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BLUESCOPE STEEL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BLUESCOPE STEEL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BLUESCOPE STEEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRAVEL + and BLUESCOPE STEEL

The main advantage of trading using opposite TRAVEL + and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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 TRAVEL LEISURE DL 01 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.