Correlation Between Champion Bear and Cobalt Blue
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Cobalt Blue 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 Champion Bear and Cobalt Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Bear Resources and Cobalt Blue Holdings, you can compare the effects of market volatilities on Champion Bear and Cobalt Blue 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 Champion Bear with a short position of Cobalt Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Cobalt Blue.
Diversification Opportunities for Champion Bear and Cobalt Blue
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champion and Cobalt is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Cobalt Blue Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Blue Holdings and Champion Bear 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 Champion Bear Resources are associated (or correlated) with Cobalt Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Blue Holdings has no effect on the direction of Champion Bear i.e., Champion Bear and Cobalt Blue go up and down completely randomly.
Pair Corralation between Champion Bear and Cobalt Blue
Assuming the 90 days horizon Champion Bear Resources is expected to generate 1.85 times more return on investment than Cobalt Blue. However, Champion Bear is 1.85 times more volatile than Cobalt Blue Holdings. It trades about 0.11 of its potential returns per unit of risk. Cobalt Blue Holdings is currently generating about -0.01 per unit of risk. If you would invest 2.00 in Champion Bear Resources on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Champion Bear Resources or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Bear Resources vs. Cobalt Blue Holdings
Performance |
| Timeline |
| Champion Bear Resources |
| Cobalt Blue Holdings |
Champion Bear and Cobalt Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Cobalt Blue
The main advantage of trading using opposite Champion Bear and Cobalt Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Cobalt Blue 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 Cobalt Blue will offset losses from the drop in Cobalt Blue's long position.| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt Corp |
| Cobalt Blue vs. Aurelia Metals Limited | Cobalt Blue vs. Centaurus Metals Limited | Cobalt Blue vs. Artemis Resources | Cobalt Blue vs. Ascendant Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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