Correlation Between B Communications and BlueScope Steel

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

By analyzing existing cross correlation between B Communications and BlueScope Steel Ltd, you can compare the effects of market volatilities on B Communications 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 B Communications with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and BlueScope Steel.

Diversification Opportunities for B Communications and BlueScope Steel

-0.32

Correlation Coefficient

B Communications  BlueScope Steel

Very good diversification

The 3 months correlation between BCOMF and BlueScope is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and BlueScope Steel Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and B Communications 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 B Communications 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 B Communications i.e., B Communications and BlueScope Steel go up and down completely randomly.

Pair Corralation between B Communications and BlueScope Steel

Assuming the 90 days horizon B Communications is expected to generate 0.59 times more return on investment than BlueScope Steel. However, B Communications is 1.69 times less risky than BlueScope Steel. It trades about 0.19 of its potential returns per unit of risk. BlueScope Steel Ltd is currently generating about 0.04 per unit of risk. If you would invest  593.00  in B Communications on September 5, 2025 and sell it today you would earn a total of  142.00  from holding B Communications or generate 23.95% return on investment over 90 days.

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

B Communications  vs.  BlueScope Steel Ltd

B Communications

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in B Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain primary indicators, B Communications reported solid returns over the last few months and may actually be approaching a breakup point.

BlueScope Steel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlueScope Steel Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, BlueScope Steel may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with B Communications and BlueScope Steel

The main advantage of trading using opposite B Communications and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications 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 B Communications and BlueScope Steel Ltd 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.