Correlation Between BlueFocus Communication and YLZ Information
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By analyzing existing cross correlation between BlueFocus Communication Group and YLZ Information Tech, you can compare the effects of market volatilities on BlueFocus Communication and YLZ Information 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 BlueFocus Communication with a short position of YLZ Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueFocus Communication and YLZ Information.
Diversification Opportunities for BlueFocus Communication and YLZ Information
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlueFocus and YLZ is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BlueFocus Communication Group and YLZ Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YLZ Information Tech and BlueFocus Communication 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 BlueFocus Communication Group are associated (or correlated) with YLZ Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YLZ Information Tech has no effect on the direction of BlueFocus Communication i.e., BlueFocus Communication and YLZ Information go up and down completely randomly.
Pair Corralation between BlueFocus Communication and YLZ Information
Assuming the 90 days trading horizon BlueFocus Communication Group is expected to generate 0.89 times more return on investment than YLZ Information. However, BlueFocus Communication Group is 1.12 times less risky than YLZ Information. It trades about 0.05 of its potential returns per unit of risk. YLZ Information Tech is currently generating about -0.03 per unit of risk. If you would invest 828.00 in BlueFocus Communication Group on September 12, 2024 and sell it today you would earn a total of 332.00 from holding BlueFocus Communication Group or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueFocus Communication Group vs. YLZ Information Tech
Performance |
| Timeline |
| BlueFocus Communication |
| YLZ Information Tech |
BlueFocus Communication and YLZ Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueFocus Communication and YLZ Information
The main advantage of trading using opposite BlueFocus Communication and YLZ Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueFocus Communication position performs unexpectedly, YLZ Information 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 YLZ Information will offset losses from the drop in YLZ Information's long position.The idea behind BlueFocus Communication Group and YLZ Information Tech 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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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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