Correlation Between BLUESCOPE STEEL and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and TotalEnergies SE, you can compare the effects of market volatilities on BLUESCOPE STEEL and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and TotalEnergies.
Diversification Opportunities for BLUESCOPE STEEL and TotalEnergies
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BLUESCOPE and TotalEnergies is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 are associated (or correlated) with TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of BLUESCOPE STEEL i.e., BLUESCOPE STEEL and TotalEnergies go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and TotalEnergies
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 1.38 times more return on investment than TotalEnergies. However, BLUESCOPE STEEL is 1.38 times more volatile than TotalEnergies SE. It trades about 0.03 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.01 per unit of risk. If you would invest 1,074 in BLUESCOPE STEEL on September 3, 2024 and sell it today you would earn a total of 276.00 from holding BLUESCOPE STEEL or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. TotalEnergies SE
Performance |
| Timeline |
| BLUESCOPE STEEL |
| TotalEnergies SE |
BLUESCOPE STEEL and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and TotalEnergies
The main advantage of trading using opposite BLUESCOPE STEEL and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| BLUESCOPE STEEL vs. Chongqing Machinery Electric | BLUESCOPE STEEL vs. BRIT AMER TOBACCO | BLUESCOPE STEEL vs. The Hanover Insurance | BLUESCOPE STEEL vs. INSURANCE AUST GRP |
| TotalEnergies vs. BORR DRILLING NEW | TotalEnergies vs. SIEM OFFSHORE NEW | TotalEnergies vs. CARSALESCOM | TotalEnergies vs. SOLSTAD OFFSHORE NK |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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