Correlation Between BlueScope Steel and DAX Index
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By analyzing existing cross correlation between BlueScope Steel Limited and DAX Index, you can compare the effects of market volatilities on BlueScope Steel and DAX Index 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 BlueScope Steel with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueScope Steel and DAX Index.
Diversification Opportunities for BlueScope Steel and DAX Index
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlueScope and DAX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Limited and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and BlueScope Steel 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 BlueScope Steel Limited are associated (or correlated) with DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and DAX Index go up and down completely randomly.
Pair Corralation between BlueScope Steel and DAX Index
Assuming the 90 days horizon BlueScope Steel Limited is expected to generate 2.0 times more return on investment than DAX Index. However, BlueScope Steel is 2.0 times more volatile than DAX Index. It trades about 0.12 of its potential returns per unit of risk. DAX Index is currently generating about 0.23 per unit of risk. If you would invest 1,190 in BlueScope Steel Limited on April 21, 2025 and sell it today you would earn a total of 160.00 from holding BlueScope Steel Limited or generate 13.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BlueScope Steel Limited vs. DAX Index
Performance |
Timeline |
BlueScope Steel and DAX Index Volatility Contrast
Predicted Return Density |
Returns |
BlueScope Steel Limited
Pair trading matchups for BlueScope Steel
DAX Index
Pair trading matchups for DAX Index
Pair Trading with BlueScope Steel and DAX Index
The main advantage of trading using opposite BlueScope Steel and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueScope Steel position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.BlueScope Steel vs. ATON GREEN STORAGE | BlueScope Steel vs. TERADATA | BlueScope Steel vs. Datang International Power | BlueScope Steel vs. Cleanaway Waste Management |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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