Correlation Between Tlou Energy and BSA
Can any of the company-specific risk be diversified away by investing in both Tlou Energy and BSA 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 Tlou Energy and BSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tlou Energy and BSA, you can compare the effects of market volatilities on Tlou Energy and BSA 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 Tlou Energy with a short position of BSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tlou Energy and BSA.
Diversification Opportunities for Tlou Energy and BSA
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tlou and BSA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tlou Energy and BSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSA and Tlou Energy 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 Tlou Energy are associated (or correlated) with BSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSA has no effect on the direction of Tlou Energy i.e., Tlou Energy and BSA go up and down completely randomly.
Pair Corralation between Tlou Energy and BSA
Assuming the 90 days trading horizon Tlou Energy is expected to under-perform the BSA. In addition to that, Tlou Energy is 3.31 times more volatile than BSA. It trades about -0.18 of its total potential returns per unit of risk. BSA is currently generating about -0.06 per unit of volatility. If you would invest 104.00 in BSA on September 23, 2024 and sell it today you would lose (6.00) from holding BSA or give up 5.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tlou Energy vs. BSA
Performance |
Timeline |
Tlou Energy |
BSA |
Tlou Energy and BSA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tlou Energy and BSA
The main advantage of trading using opposite Tlou Energy and BSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tlou Energy position performs unexpectedly, BSA 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 BSA will offset losses from the drop in BSA's long position.Tlou Energy vs. Westpac Banking | Tlou Energy vs. ABACUS STORAGE KING | Tlou Energy vs. Odyssey Energy | Tlou Energy vs. Suncorp Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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