Correlation Between UNION and BlueScope Steel

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

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

Diversification Opportunities for UNION and BlueScope Steel

0.0

Correlation Coefficient

UNION  BlueScope Steel

Pay attention - limited upside

The 3 months correlation between UNION and BlueScope is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UNION PAC P and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and UNION 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 UNION PAC P 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 UNION i.e., UNION and BlueScope Steel go up and down completely randomly.

Pair Corralation between UNION and BlueScope Steel

If you would invest  1,450  in BlueScope Steel Limited on May 5, 2025 and sell it today you would earn a total of  57.00  from holding BlueScope Steel Limited or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.7%
Values	Daily Returns

UNION PAC P  vs.  BlueScope Steel Limited

UNION PAC P

Risk-Adjusted Performance

Very Weak

Over the last 90 days UNION PAC P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UNION is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BlueScope Steel

Risk-Adjusted Performance

Good

Over the last 90 days BlueScope Steel Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady technical and fundamental indicators, BlueScope Steel may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with UNION and BlueScope Steel

The main advantage of trading using opposite UNION and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNION 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 UNION PAC P and BlueScope Steel Limited 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.