Correlation Between Blue Star and Eco (Atlantic)
Can any of the company-specific risk be diversified away by investing in both Blue Star and Eco (Atlantic) 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 Eco (Atlantic) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Helium and Eco Oil Gas, you can compare the effects of market volatilities on Blue Star and Eco (Atlantic) 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 Eco (Atlantic). Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Eco (Atlantic).
Diversification Opportunities for Blue Star and Eco (Atlantic)
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blue and Eco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Helium and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco (Atlantic) 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 Helium are associated (or correlated) with Eco (Atlantic). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco (Atlantic) has no effect on the direction of Blue Star i.e., Blue Star and Eco (Atlantic) go up and down completely randomly.
Pair Corralation between Blue Star and Eco (Atlantic)
Assuming the 90 days horizon Blue Star Helium is expected to generate 19.23 times more return on investment than Eco (Atlantic). However, Blue Star is 19.23 times more volatile than Eco Oil Gas. It trades about 0.13 of its potential returns per unit of risk. Eco Oil Gas is currently generating about -0.03 per unit of risk. If you would invest 0.40 in Blue Star Helium on August 30, 2024 and sell it today you would lose (0.10) from holding Blue Star Helium or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Star Helium vs. Eco Oil Gas
Performance |
| Timeline |
| Blue Star Helium |
| Eco (Atlantic) |
Blue Star and Eco (Atlantic) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Eco (Atlantic)
The main advantage of trading using opposite Blue Star and Eco (Atlantic) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Eco (Atlantic) 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 Eco (Atlantic) will offset losses from the drop in Eco (Atlantic)'s long position.| Blue Star vs. Barrister Energy LLC | Blue Star vs. Buru Energy Limited | Blue Star vs. Altura Energy | Blue Star vs. Daybreak Oil and |
| Eco (Atlantic) vs. CGX Energy | Eco (Atlantic) vs. Frontera Energy Corp | Eco (Atlantic) vs. Africa Energy Corp | Eco (Atlantic) vs. Africa Oil 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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