Correlation Between Blue Star and Real Good
Can any of the company-specific risk be diversified away by investing in both Blue Star and Real Good 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 Real Good 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 Real Good Food, you can compare the effects of market volatilities on Blue Star and Real Good 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 Real Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Real Good.
Diversification Opportunities for Blue Star and Real Good
Very poor diversification
The 3 months correlation between Blue and Real is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Real Good Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Good Food 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 Real Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Good Food has no effect on the direction of Blue Star i.e., Blue Star and Real Good go up and down completely randomly.
Pair Corralation between Blue Star and Real Good
Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the Real Good. In addition to that, Blue Star is 1.55 times more volatile than Real Good Food. It trades about -0.39 of its total potential returns per unit of risk. Real Good Food is currently generating about -0.31 per unit of volatility. If you would invest 33.00 in Real Good Food on August 27, 2024 and sell it today you would lose (8.00) from holding Real Good Food or give up 24.24% 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. Real Good Food
Performance |
| Timeline |
| Blue Star Foods |
| Real Good Food |
Blue Star and Real Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Real Good
The main advantage of trading using opposite Blue Star and Real Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Real Good 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 Real Good will offset losses from the drop in Real Good's long position.| Blue Star vs. Better Choice | Blue Star vs. Stryve Foods | Blue Star vs. BioAdaptives | Blue Star vs. Beyond Oil |
| Real Good vs. Bellring Brands LLC | Real Good vs. Ingredion Incorporated | Real Good vs. Nomad Foods | Real Good vs. Simply Good Foods |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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