Correlation Between Crédit Agricole and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both Crédit Agricole 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 Crédit Agricole and BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crdit Agricole SA and BlueScope Steel Limited, you can compare the effects of market volatilities on Crédit Agricole 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 Crédit Agricole with a short position of BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and BlueScope Steel.
Diversification Opportunities for Crédit Agricole and BlueScope Steel
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crédit and BlueScope is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole 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 Crédit Agricole 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 Crdit Agricole 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 Crédit Agricole i.e., Crédit Agricole and BlueScope Steel go up and down completely randomly.
Pair Corralation between Crédit Agricole and BlueScope Steel
Assuming the 90 days horizon Crdit Agricole SA is expected to generate 0.68 times more return on investment than BlueScope Steel. However, Crdit Agricole SA is 1.46 times less risky than BlueScope Steel. It trades about 0.33 of its potential returns per unit of risk. BlueScope Steel Limited is currently generating about 0.08 per unit of risk. If you would invest 1,300 in Crdit Agricole SA on October 20, 2024 and sell it today you would earn a total of 100.00 from holding Crdit Agricole SA or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crdit Agricole SA vs. BlueScope Steel Limited
Performance |
| Timeline |
| Crdit Agricole SA |
| BlueScope Steel |
Crédit Agricole and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crédit Agricole and BlueScope Steel
The main advantage of trading using opposite Crédit Agricole and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crédit Agricole 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.| Crédit Agricole vs. BNP Paribas SA | Crédit Agricole vs. BNP PARIBAS ADR | Crédit Agricole vs. Intesa Sanpaolo SpA | Crédit Agricole vs. Lloyds Banking Group |
| BlueScope Steel vs. INSURANCE AUST GRP | BlueScope Steel vs. AOI Electronics Co | BlueScope Steel vs. Zurich Insurance Group | BlueScope Steel vs. TT Electronics PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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