Correlation Between BQE Water and Blue Water
Can any of the company-specific risk be diversified away by investing in both BQE Water and Blue Water 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 BQE Water and Blue Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BQE Water and Blue Water Petroleum, you can compare the effects of market volatilities on BQE Water and Blue Water 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 BQE Water with a short position of Blue Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of BQE Water and Blue Water.
Diversification Opportunities for BQE Water and Blue Water
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BQE and Blue is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BQE Water and Blue Water Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Water Petroleum and BQE Water 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 BQE Water are associated (or correlated) with Blue Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Water Petroleum has no effect on the direction of BQE Water i.e., BQE Water and Blue Water go up and down completely randomly.
Pair Corralation between BQE Water and Blue Water
Assuming the 90 days horizon BQE Water is expected to generate 0.33 times more return on investment than Blue Water. However, BQE Water is 3.0 times less risky than Blue Water. It trades about 0.05 of its potential returns per unit of risk. Blue Water Petroleum is currently generating about 0.01 per unit of risk. If you would invest 2,350 in BQE Water on November 27, 2024 and sell it today you would earn a total of 1,747 from holding BQE Water or generate 74.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.16% |
| Values | Daily Returns |
BQE Water vs. Blue Water Petroleum
Performance |
| Timeline |
| BQE Water |
| Blue Water Petroleum |
BQE Water and Blue Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BQE Water and Blue Water
The main advantage of trading using opposite BQE Water and Blue Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BQE Water position performs unexpectedly, Blue Water 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 Blue Water will offset losses from the drop in Blue Water's long position.| BQE Water vs. JPX Global | BQE Water vs. Susglobal Energy Corp | BQE Water vs. Agilyx AS | BQE Water vs. EcoPlus |
| Blue Water vs. BQE Water | Blue Water vs. JPX Global | Blue Water vs. Aqua Metals | Blue Water vs. LanzaTech Global |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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