Correlation Between ALBIS LEASING and BLUESCOPE STEEL

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

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

Diversification Opportunities for ALBIS LEASING and BLUESCOPE STEEL

0.45

Correlation Coefficient

ALBIS LEASING  BLUESCOPE STEEL

Very weak diversification

The 3 months correlation between ALBIS and BLUESCOPE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and BLUESCOPE STEEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUESCOPE STEEL and ALBIS LEASING 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 ALBIS LEASING AG 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 ALBIS LEASING i.e., ALBIS LEASING and BLUESCOPE STEEL go up and down completely randomly.

Pair Corralation between ALBIS LEASING and BLUESCOPE STEEL

Assuming the 90 days trading horizon ALBIS LEASING is expected to generate 1.17 times less return on investment than BLUESCOPE STEEL. But when comparing it to its historical volatility, ALBIS LEASING AG is 2.52 times less risky than BLUESCOPE STEEL. It trades about 0.2 of its potential returns per unit of risk. BLUESCOPE STEEL is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,170  in BLUESCOPE STEEL on September 12, 2024 and sell it today you would earn a total of  150.00  from holding BLUESCOPE STEEL or generate 12.82% return on investment over 90 days.

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

ALBIS LEASING AG  vs.  BLUESCOPE STEEL

ALBIS LEASING AG

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, ALBIS LEASING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BLUESCOPE STEEL

Risk-Adjusted Performance

7 of 100

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 uncertain basic indicators, BLUESCOPE STEEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALBIS LEASING and BLUESCOPE STEEL

The main advantage of trading using opposite ALBIS LEASING and BLUESCOPE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALBIS LEASING 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 ALBIS LEASING AG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.