Correlation Between Blue Star and Bank of Georgia
Can any of the company-specific risk be diversified away by investing in both Blue Star and Bank of Georgia 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 Bank of Georgia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Capital and Bank of Georgia, you can compare the effects of market volatilities on Blue Star and Bank of Georgia 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 Bank of Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Bank of Georgia.
Diversification Opportunities for Blue Star and Bank of Georgia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and Bank is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Capital and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia 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 Capital are associated (or correlated) with Bank of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia has no effect on the direction of Blue Star i.e., Blue Star and Bank of Georgia go up and down completely randomly.
Pair Corralation between Blue Star and Bank of Georgia
Assuming the 90 days trading horizon Blue Star Capital is expected to under-perform the Bank of Georgia. In addition to that, Blue Star is 2.99 times more volatile than Bank of Georgia. It trades about -0.03 of its total potential returns per unit of risk. Bank of Georgia is currently generating about 0.08 per unit of volatility. If you would invest 227,020 in Bank of Georgia on September 19, 2024 and sell it today you would earn a total of 247,980 from holding Bank of Georgia or generate 109.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Star Capital vs. Bank of Georgia
Performance |
| Timeline |
| Blue Star Capital |
| Bank of Georgia |
Blue Star and Bank of Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Bank of Georgia
The main advantage of trading using opposite Blue Star and Bank of Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Bank of Georgia 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 Bank of Georgia will offset losses from the drop in Bank of Georgia's long position.| Blue Star vs. Catalyst Media Group | Blue Star vs. CATLIN GROUP | Blue Star vs. Tamburi Investment Partners | Blue Star vs. Magnora ASA |
| Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Hyundai Motor | Bank of Georgia vs. Toyota Motor 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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