Correlation Between Blue Star and Invictus Energy
Can any of the company-specific risk be diversified away by investing in both Blue Star and Invictus Energy 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 Invictus Energy 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 Invictus Energy Limited, you can compare the effects of market volatilities on Blue Star and Invictus Energy 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 Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Invictus Energy.
Diversification Opportunities for Blue Star and Invictus Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blue and Invictus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Helium and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy 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 Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Blue Star i.e., Blue Star and Invictus Energy go up and down completely randomly.
Pair Corralation between Blue Star and Invictus Energy
Assuming the 90 days horizon Blue Star Helium is expected to generate 25.05 times more return on investment than Invictus Energy. However, Blue Star is 25.05 times more volatile than Invictus Energy Limited. It trades about 0.13 of its potential returns per unit of risk. Invictus Energy Limited is currently generating about -0.08 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. Invictus Energy Limited
Performance |
| Timeline |
| Blue Star Helium |
| Invictus Energy |
Blue Star and Invictus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and Invictus Energy
The main advantage of trading using opposite Blue Star and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star position performs unexpectedly, Invictus Energy 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 Invictus Energy will offset losses from the drop in Invictus Energy'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 |
| Invictus Energy vs. Sintana Energy | Invictus Energy vs. 88 Energy Limited | Invictus Energy vs. Journey Energy | Invictus Energy vs. Trillion Energy International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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