Correlation Between ICeram SA and Bluelinea
Can any of the company-specific risk be diversified away by investing in both ICeram SA and Bluelinea 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 ICeram SA and Bluelinea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICeram SA and Bluelinea SA, you can compare the effects of market volatilities on ICeram SA and Bluelinea 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 ICeram SA with a short position of Bluelinea. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICeram SA and Bluelinea.
Diversification Opportunities for ICeram SA and Bluelinea
Very good diversification
The 3 months correlation between ICeram and Bluelinea is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ICeram SA and Bluelinea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluelinea SA and ICeram 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 ICeram SA are associated (or correlated) with Bluelinea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluelinea SA has no effect on the direction of ICeram SA i.e., ICeram SA and Bluelinea go up and down completely randomly.
Pair Corralation between ICeram SA and Bluelinea
Assuming the 90 days trading horizon ICeram SA is expected to under-perform the Bluelinea. In addition to that, ICeram SA is 3.71 times more volatile than Bluelinea SA. It trades about -0.05 of its total potential returns per unit of risk. Bluelinea SA is currently generating about -0.02 per unit of volatility. If you would invest 130.00 in Bluelinea SA on September 3, 2024 and sell it today you would lose (40.00) from holding Bluelinea SA or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
ICeram SA vs. Bluelinea SA
Performance |
| Timeline |
| ICeram SA |
| Bluelinea SA |
ICeram SA and Bluelinea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICeram SA and Bluelinea
The main advantage of trading using opposite ICeram SA and Bluelinea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICeram SA position performs unexpectedly, Bluelinea 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 Bluelinea will offset losses from the drop in Bluelinea's long position.The idea behind ICeram SA and Bluelinea SA 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.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |