Correlation Between Blue Star and Sharing Services
Can any of the company-specific risk be diversified away by investing in both Blue Star and Sharing Services 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 Sharing Services 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 Sharing Services Global, you can compare the effects of market volatilities on Blue Star and Sharing Services 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 Sharing Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Sharing Services.
Diversification Opportunities for Blue Star and Sharing Services
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blue and Sharing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Sharing Services Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharing Services Global 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 Sharing Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharing Services Global has no effect on the direction of Blue Star i.e., Blue Star and Sharing Services go up and down completely randomly.
Pair Corralation between Blue Star and Sharing Services
Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the Sharing Services. But the stock apears to be less risky and, when comparing its historical volatility, Blue Star Foods is 1.3 times less risky than Sharing Services. The stock trades about -0.08 of its potential returns per unit of risk. The Sharing Services Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Sharing Services Global on August 27, 2024 and sell it today you would lose (253.00) from holding Sharing Services Global or give up 87.85% 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. Sharing Services Global
Performance |
| Timeline |
| Blue Star Foods |
| Sharing Services Global |
Blue Star and Sharing Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Sharing Services
The main advantage of trading using opposite Blue Star and Sharing Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Sharing Services 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 Sharing Services will offset losses from the drop in Sharing Services' long position.| Blue Star vs. Better Choice | Blue Star vs. Stryve Foods | Blue Star vs. BioAdaptives | Blue Star vs. Beyond Oil |
| Sharing Services vs. Artisan Consumer Goods | Sharing Services vs. The A2 Milk | Sharing Services vs. BioAdaptives | Sharing Services vs. General Mills |
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.
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