Correlation Between Kering SA and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both Kering SA 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 Kering SA and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and BlueScope Steel Limited, you can compare the effects of market volatilities on Kering SA 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 Kering SA with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and BlueScope Steel.
Diversification Opportunities for Kering SA and BlueScope Steel
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kering and BlueScope is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel and Kering SA 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 Kering SA 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 Kering SA i.e., Kering SA and BlueScope Steel go up and down completely randomly.
Pair Corralation between Kering SA and BlueScope Steel
Assuming the 90 days horizon Kering SA is expected to under-perform the BlueScope Steel. But the stock apears to be less risky and, when comparing its historical volatility, Kering SA is 1.0 times less risky than BlueScope Steel. The stock trades about -0.05 of its potential returns per unit of risk. The BlueScope Steel Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,240 in BlueScope Steel Limited on September 5, 2024 and sell it today you would earn a total of 120.00 from holding BlueScope Steel Limited or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kering SA vs. BlueScope Steel Limited
Performance |
| Timeline |
| Kering SA |
| BlueScope Steel |
Kering SA and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and BlueScope Steel
The main advantage of trading using opposite Kering SA and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA 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.| Kering SA vs. BlueScope Steel Limited | Kering SA vs. Perma Fix Environmental Services | Kering SA vs. CosmoSteel Holdings Limited | Kering SA vs. Tianjin Capital Environmental |
| BlueScope Steel vs. SCANDMEDICAL SOLDK 040 | BlueScope Steel vs. Apollo Medical Holdings | BlueScope Steel vs. CVR Medical Corp | BlueScope Steel vs. Microbot Medical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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