Correlation Between BLZ and SYS
Can any of the company-specific risk be diversified away by investing in both BLZ and SYS 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 BLZ and SYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLZ and SYS, you can compare the effects of market volatilities on BLZ and SYS 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 BLZ with a short position of SYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLZ and SYS.
Diversification Opportunities for BLZ and SYS
Poor diversification
The 3 months correlation between BLZ and SYS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and SYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYS and BLZ 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 BLZ are associated (or correlated) with SYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYS has no effect on the direction of BLZ i.e., BLZ and SYS go up and down completely randomly.
Pair Corralation between BLZ and SYS
Assuming the 90 days trading horizon BLZ is expected to under-perform the SYS. But the crypto coin apears to be less risky and, when comparing its historical volatility, BLZ is 1.5 times less risky than SYS. The crypto coin trades about -0.02 of its potential returns per unit of risk. The SYS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 20.00 in SYS on September 3, 2024 and sell it today you would lose (6.00) from holding SYS or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLZ vs. SYS
Performance |
| Timeline |
| BLZ |
| SYS |
BLZ and SYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLZ and SYS
The main advantage of trading using opposite BLZ and SYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLZ position performs unexpectedly, SYS 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 SYS will offset losses from the drop in SYS's long position.The idea behind BLZ and SYS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |