Correlation Between Blue Star and Cabral Gold
Can any of the company-specific risk be diversified away by investing in both Blue Star and Cabral Gold 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 Cabral Gold 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 Cabral Gold, you can compare the effects of market volatilities on Blue Star and Cabral Gold 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 Cabral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Cabral Gold.
Diversification Opportunities for Blue Star and Cabral Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blue and Cabral is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Gold and Cabral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabral 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 Cabral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabral Gold has no effect on the direction of Blue Star i.e., Blue Star and Cabral Gold go up and down completely randomly.
Pair Corralation between Blue Star and Cabral Gold
If you would invest 16.00 in Cabral Gold on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Cabral Gold or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Blue Star Gold vs. Cabral Gold
Performance |
| Timeline |
| Blue Star Gold |
| Cabral Gold |
Blue Star and Cabral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Cabral Gold
The main advantage of trading using opposite Blue Star and Cabral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Cabral Gold 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 Cabral Gold will offset losses from the drop in Cabral Gold'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 |
| Cabral Gold vs. Newcore Gold | Cabral Gold vs. Cerrado Gold | Cabral Gold vs. Palamina Corp | Cabral Gold vs. Gold Springs Resource |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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