Correlation Between Blue Star and Better Choice
Can any of the company-specific risk be diversified away by investing in both Blue Star and Better Choice 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 Better Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Foods and Better Choice, you can compare the effects of market volatilities on Blue Star and Better Choice 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 Better Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Better Choice.
Diversification Opportunities for Blue Star and Better Choice
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blue and Better is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Better Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Choice 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 Foods are associated (or correlated) with Better Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Choice has no effect on the direction of Blue Star i.e., Blue Star and Better Choice go up and down completely randomly.
Pair Corralation between Blue Star and Better Choice
Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the Better Choice. In addition to that, Blue Star is 1.56 times more volatile than Better Choice. It trades about -0.5 of its total potential returns per unit of risk. Better Choice is currently generating about -0.02 per unit of volatility. If you would invest 179.00 in Better Choice on August 24, 2024 and sell it today you would lose (9.00) from holding Better Choice or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Star Foods vs. Better Choice
Performance |
| Timeline |
| Blue Star Foods |
| Better Choice |
Blue Star and Better Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Better Choice
The main advantage of trading using opposite Blue Star and Better Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Better Choice 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 Better Choice will offset losses from the drop in Better Choice's long position.| Blue Star vs. Better Choice | Blue Star vs. BioAdaptives | Blue Star vs. Beyond Oil | Blue Star vs. Bon Natural Life |
| Better Choice vs. Blue Star Foods | Better Choice vs. Stryve Foods | Better Choice vs. BioAdaptives | Better Choice vs. Beyond Oil |
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 CEOs Directory module to screen CEOs from public companies around the world.
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