Correlation Between Blue Star and American Eagle
Can any of the company-specific risk be diversified away by investing in both Blue Star and American Eagle 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 Blue Star and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Gold and American Eagle Gold, you can compare the effects of market volatilities on Blue Star and American Eagle 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 Blue Star with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and American Eagle.
Diversification Opportunities for Blue Star and American Eagle
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and American is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Gold and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold and Blue Star 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 Blue Star Gold are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of Blue Star i.e., Blue Star and American Eagle go up and down completely randomly.
Pair Corralation between Blue Star and American Eagle
Assuming the 90 days horizon Blue Star Gold is expected to under-perform the American Eagle. But the otc stock apears to be less risky and, when comparing its historical volatility, Blue Star Gold is 1.33 times less risky than American Eagle. The otc stock trades about -0.01 of its potential returns per unit of risk. The American Eagle Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.50 in American Eagle Gold on December 1, 2024 and sell it today you would earn a total of 25.50 from holding American Eagle Gold or generate 463.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Blue Star Gold vs. American Eagle Gold
Performance |
| Timeline |
| Blue Star Gold |
| American Eagle Gold |
Blue Star and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and American Eagle
The main advantage of trading using opposite Blue Star and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| Blue Star vs. Argo Gold | Blue Star vs. Minnova Corp | Blue Star vs. Angkor Resources Corp | Blue Star vs. Advance United Holdings |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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