Correlation Between A W and Blue Thunder
Can any of the company-specific risk be diversified away by investing in both A W and Blue Thunder 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 A W and Blue Thunder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A W FOOD and Blue Thunder Mining, you can compare the effects of market volatilities on A W and Blue Thunder 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 A W with a short position of Blue Thunder. Check out your portfolio center. Please also check ongoing floating volatility patterns of A W and Blue Thunder.
Diversification Opportunities for A W and Blue Thunder
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between A W and Blue is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding A W FOOD and Blue Thunder Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Thunder Mining and A W 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 A W FOOD are associated (or correlated) with Blue Thunder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Thunder Mining has no effect on the direction of A W i.e., A W and Blue Thunder go up and down completely randomly.
Pair Corralation between A W and Blue Thunder
Assuming the 90 days horizon A W FOOD is expected to generate 0.28 times more return on investment than Blue Thunder. However, A W FOOD is 3.53 times less risky than Blue Thunder. It trades about -0.15 of its potential returns per unit of risk. Blue Thunder Mining is currently generating about -0.06 per unit of risk. If you would invest 4,030 in A W FOOD on September 5, 2024 and sell it today you would lose (360.00) from holding A W FOOD or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.93% |
| Values | Daily Returns |
A W FOOD vs. Blue Thunder Mining
Performance |
| Timeline |
| A W FOOD |
| Blue Thunder Mining |
A W and Blue Thunder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A W and Blue Thunder
The main advantage of trading using opposite A W and Blue Thunder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A W position performs unexpectedly, Blue Thunder 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 Blue Thunder will offset losses from the drop in Blue Thunder's long position.| A W vs. Restaurant Brands International | A W vs. Restaurant Brands International | A W vs. MTY Food Group | A W vs. Boston Pizza Royalties |
| Blue Thunder vs. A W FOOD | Blue Thunder vs. Summa Silver Corp | Blue Thunder vs. Rubicon Organics | Blue Thunder vs. Metalero Mining Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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