Correlation Between Blue Capital and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Blue Capital and BBB Foods 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 Capital and BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Capital Reinsurance and BBB Foods, you can compare the effects of market volatilities on Blue Capital and BBB Foods 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 Capital with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Capital and BBB Foods.
Diversification Opportunities for Blue Capital and BBB Foods
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and BBB is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Blue Capital Reinsurance and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and Blue Capital 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 Capital Reinsurance are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Blue Capital i.e., Blue Capital and BBB Foods go up and down completely randomly.
Pair Corralation between Blue Capital and BBB Foods
If you would invest 1,750 in BBB Foods on September 2, 2024 and sell it today you would earn a total of 1,072 from holding BBB Foods or generate 61.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.49% |
| Values | Daily Returns |
Blue Capital Reinsurance vs. BBB Foods
Performance |
| Timeline |
| Blue Capital Reinsurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BBB Foods |
Blue Capital and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Capital and BBB Foods
The main advantage of trading using opposite Blue Capital and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Capital position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Blue Capital vs. Eastman Chemical | Blue Capital vs. Chemours Co | Blue Capital vs. The Mosaic | Blue Capital vs. CF Industries Holdings |
| BBB Foods vs. Vita Coco | BBB Foods vs. Independence Realty Trust | BBB Foods vs. Inflection Point Acquisition | BBB Foods vs. Anheuser Busch Inbev |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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