Correlation Between Baker Steel and Compagnie

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

By analyzing existing cross correlation between Baker Steel Resources and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Baker Steel and Compagnie 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 Baker Steel with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Compagnie.

Diversification Opportunities for Baker Steel and Compagnie

0.0

Correlation Coefficient

Baker Steel  Compagnie

Pay attention - limited upside

The 3 months correlation between Baker and Compagnie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and Baker 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 Baker Steel Resources are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Baker Steel i.e., Baker Steel and Compagnie go up and down completely randomly.

Pair Corralation between Baker Steel and Compagnie

If you would invest  4,950  in Baker Steel Resources on April 20, 2025 and sell it today you would earn a total of  1,750  from holding Baker Steel Resources or generate 35.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Baker Steel Resources  vs.  Compagnie de Saint Gobain

Baker Steel Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baker Steel Resources are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Baker Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Compagnie de Saint

Risk-Adjusted Performance

Good

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Compagnie is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Baker Steel and Compagnie

The main advantage of trading using opposite Baker Steel and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.

The idea behind Baker Steel Resources and Compagnie de Saint Gobain 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.