Correlation Between BlueScope Steel and JBS NV

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

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

Diversification Opportunities for BlueScope Steel and JBS NV

-0.63

Correlation Coefficient

BlueScope Steel  JBS NV

Excellent diversification

The 3 months correlation between BlueScope and JBS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BlueScope Steel Ltd and JBS NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBS NV 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 Ltd are associated (or correlated) with JBS NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBS NV has no effect on the direction of BlueScope Steel i.e., BlueScope Steel and JBS NV go up and down completely randomly.

Pair Corralation between BlueScope Steel and JBS NV

Assuming the 90 days horizon BlueScope Steel Ltd is expected to generate 2.84 times more return on investment than JBS NV. However, BlueScope Steel is 2.84 times more volatile than JBS NV. It trades about 0.01 of its potential returns per unit of risk. JBS NV is currently generating about -0.53 per unit of risk. If you would invest  7,478  in BlueScope Steel Ltd on June 28, 2025 and sell it today you would lose (3.00) from holding BlueScope Steel Ltd or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

BlueScope Steel Ltd  vs.  JBS NV

BlueScope Steel

Risk-Adjusted Performance

Weakest

Over the last 90 days BlueScope Steel Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BlueScope Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JBS NV

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in JBS NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, JBS NV is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlueScope Steel and JBS NV

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

The idea behind BlueScope Steel Ltd and JBS NV 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.