Correlation Between BlueFocus Communication and National Silicon
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By analyzing existing cross correlation between BlueFocus Communication Group and National Silicon Industry, you can compare the effects of market volatilities on BlueFocus Communication and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueFocus Communication and National Silicon.
Diversification Opportunities for BlueFocus Communication and National Silicon
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlueFocus and National is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BlueFocus Communication Group and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of BlueFocus Communication i.e., BlueFocus Communication and National Silicon go up and down completely randomly.
Pair Corralation between BlueFocus Communication and National Silicon
Assuming the 90 days trading horizon BlueFocus Communication Group is expected to generate 2.38 times more return on investment than National Silicon. However, BlueFocus Communication is 2.38 times more volatile than National Silicon Industry. It trades about 0.16 of its potential returns per unit of risk. National Silicon Industry is currently generating about -0.18 per unit of risk. If you would invest 947.00 in BlueFocus Communication Group on September 12, 2024 and sell it today you would earn a total of 206.00 from holding BlueFocus Communication Group or generate 21.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueFocus Communication Group vs. National Silicon Industry
Performance |
| Timeline |
| BlueFocus Communication |
| National Silicon Industry |
BlueFocus Communication and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueFocus Communication and National Silicon
The main advantage of trading using opposite BlueFocus Communication and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueFocus Communication position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.The idea behind BlueFocus Communication Group and National Silicon Industry 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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