Correlation Between Blue Lagoon and Heliostar Metals
Can any of the company-specific risk be diversified away by investing in both Blue Lagoon and Heliostar Metals 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 Lagoon and Heliostar Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Lagoon Resources and Heliostar Metals, you can compare the effects of market volatilities on Blue Lagoon and Heliostar Metals 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 Lagoon with a short position of Heliostar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Lagoon and Heliostar Metals.
Diversification Opportunities for Blue Lagoon and Heliostar Metals
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blue and Heliostar is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Blue Lagoon Resources and Heliostar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heliostar Metals and Blue Lagoon 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 Lagoon Resources are associated (or correlated) with Heliostar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heliostar Metals has no effect on the direction of Blue Lagoon i.e., Blue Lagoon and Heliostar Metals go up and down completely randomly.
Pair Corralation between Blue Lagoon and Heliostar Metals
Assuming the 90 days horizon Blue Lagoon Resources is expected to under-perform the Heliostar Metals. In addition to that, Blue Lagoon is 2.05 times more volatile than Heliostar Metals. It trades about -0.07 of its total potential returns per unit of risk. Heliostar Metals is currently generating about -0.02 per unit of volatility. If you would invest 40.00 in Heliostar Metals on October 23, 2024 and sell it today you would lose (1.00) from holding Heliostar Metals or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Lagoon Resources vs. Heliostar Metals
Performance |
| Timeline |
| Blue Lagoon Resources |
| Heliostar Metals |
Blue Lagoon and Heliostar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Lagoon and Heliostar Metals
The main advantage of trading using opposite Blue Lagoon and Heliostar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Lagoon position performs unexpectedly, Heliostar Metals 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 Heliostar Metals will offset losses from the drop in Heliostar Metals' long position.| Blue Lagoon vs. Red Pine Exploration | Blue Lagoon vs. Grande Portage Resources | Blue Lagoon vs. White Gold Corp | Blue Lagoon vs. Sitka Gold Corp |
| Heliostar Metals vs. Westward Gold | Heliostar Metals vs. Revival Gold | Heliostar Metals vs. Cabral Gold | Heliostar Metals vs. Cassiar Gold Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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