Correlation Between Blue Current and Locorr Long/short
Can any of the company-specific risk be diversified away by investing in both Blue Current and Locorr Long/short 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 Current and Locorr Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Current Global and Locorr Longshort Modities, you can compare the effects of market volatilities on Blue Current and Locorr Long/short 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 Current with a short position of Locorr Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Current and Locorr Long/short.
Diversification Opportunities for Blue Current and Locorr Long/short
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blue and Locorr is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Blue Current Global and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities and Blue Current 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 Current Global are associated (or correlated) with Locorr Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Blue Current i.e., Blue Current and Locorr Long/short go up and down completely randomly.
Pair Corralation between Blue Current and Locorr Long/short
Assuming the 90 days horizon Blue Current Global is expected to generate 2.21 times more return on investment than Locorr Long/short. However, Blue Current is 2.21 times more volatile than Locorr Longshort Modities. It trades about -0.05 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.21 per unit of risk. If you would invest 1,628 in Blue Current Global on August 29, 2024 and sell it today you would lose (11.00) from holding Blue Current Global or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Current Global vs. Locorr Longshort Modities
Performance |
| Timeline |
| Blue Current Global |
| Locorr Longshort Modities |
Blue Current and Locorr Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Current and Locorr Long/short
The main advantage of trading using opposite Blue Current and Locorr Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Current position performs unexpectedly, Locorr Long/short 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 Locorr Long/short will offset losses from the drop in Locorr Long/short's long position.| Blue Current vs. Franklin Mutual Global | Blue Current vs. Franklin Mutual Global | Blue Current vs. Franklin Mutual Global |
| Locorr Long/short vs. Barings Global Floating | Locorr Long/short vs. Mirova Global Green | Locorr Long/short vs. Us Global Leaders | Locorr Long/short vs. Blue Current Global |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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