Correlation Between Blue Diamond and SGS SA
Can any of the company-specific risk be diversified away by investing in both Blue Diamond and SGS SA 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 Diamond and SGS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Diamond Ventures and SGS SA, you can compare the effects of market volatilities on Blue Diamond and SGS SA 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 Diamond with a short position of SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Diamond and SGS SA.
Diversification Opportunities for Blue Diamond and SGS SA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blue and SGS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Blue Diamond Ventures and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA and Blue Diamond 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 Diamond Ventures are associated (or correlated) with SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Blue Diamond i.e., Blue Diamond and SGS SA go up and down completely randomly.
Pair Corralation between Blue Diamond and SGS SA
Given the investment horizon of 90 days Blue Diamond Ventures is expected to generate 36.73 times more return on investment than SGS SA. However, Blue Diamond is 36.73 times more volatile than SGS SA. It trades about 0.25 of its potential returns per unit of risk. SGS SA is currently generating about -0.24 per unit of risk. If you would invest 0.01 in Blue Diamond Ventures on August 28, 2024 and sell it today you would earn a total of 0.01 from holding Blue Diamond Ventures or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Diamond Ventures vs. SGS SA
Performance |
| Timeline |
| Blue Diamond Ventures |
| SGS SA |
Blue Diamond and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Diamond and SGS SA
The main advantage of trading using opposite Blue Diamond and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Diamond position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| Blue Diamond vs. Sack Lunch Productions | Blue Diamond vs. Potash America | Blue Diamond vs. Dalrada Financial Corp | Blue Diamond vs. TransUnion |
| SGS SA vs. 51Talk Online Education | SGS SA vs. Mills Music Trust | SGS SA vs. Stagwell | SGS SA vs. Fluent Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |