Correlation Between Blue Star and Angkor Resources
Can any of the company-specific risk be diversified away by investing in both Blue Star and Angkor Resources 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 Angkor Resources 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 Angkor Resources Corp, you can compare the effects of market volatilities on Blue Star and Angkor Resources 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 Angkor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Angkor Resources.
Diversification Opportunities for Blue Star and Angkor Resources
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blue and Angkor is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Gold and Angkor Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angkor Resources Corp 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 Angkor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angkor Resources Corp has no effect on the direction of Blue Star i.e., Blue Star and Angkor Resources go up and down completely randomly.
Pair Corralation between Blue Star and Angkor Resources
Assuming the 90 days horizon Blue Star Gold is expected to generate 0.08 times more return on investment than Angkor Resources. However, Blue Star Gold is 11.87 times less risky than Angkor Resources. It trades about -0.21 of its potential returns per unit of risk. Angkor Resources Corp is currently generating about -0.07 per unit of risk. If you would invest 3.58 in Blue Star Gold on August 29, 2024 and sell it today you would lose (0.09) from holding Blue Star Gold or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Star Gold vs. Angkor Resources Corp
Performance |
| Timeline |
| Blue Star Gold |
| Angkor Resources Corp |
Blue Star and Angkor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Angkor Resources
The main advantage of trading using opposite Blue Star and Angkor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Angkor Resources 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 Angkor Resources will offset losses from the drop in Angkor Resources' long position.| Blue Star vs. Argo Gold | Blue Star vs. Minnova Corp | Blue Star vs. Angkor Resources Corp | Blue Star vs. Advance United Holdings |
| Angkor Resources vs. Argo Gold | Angkor Resources vs. Blue Star Gold | Angkor Resources vs. Advance Gold Corp | Angkor Resources vs. Advance United Holdings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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