Correlation Between Edison Cobalt and Cobalt Blue
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt 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 Edison Cobalt and Cobalt Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and Cobalt Blue Holdings, you can compare the effects of market volatilities on Edison Cobalt 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 Edison Cobalt with a short position of Cobalt Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and Cobalt Blue.
Diversification Opportunities for Edison Cobalt and Cobalt Blue
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edison and Cobalt is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp 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 Edison Cobalt 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 Edison Cobalt Corp 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 Edison Cobalt i.e., Edison Cobalt and Cobalt Blue go up and down completely randomly.
Pair Corralation between Edison Cobalt and Cobalt Blue
Assuming the 90 days horizon Edison Cobalt Corp is expected to generate 3.96 times more return on investment than Cobalt Blue. However, Edison Cobalt is 3.96 times more volatile than Cobalt Blue Holdings. It trades about 0.04 of its potential returns per unit of risk. Cobalt Blue Holdings is currently generating about 0.02 per unit of risk. If you would invest 33.00 in Edison Cobalt Corp on November 9, 2024 and sell it today you would lose (27.90) from holding Edison Cobalt Corp or give up 84.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Edison Cobalt Corp vs. Cobalt Blue Holdings
Performance |
| Timeline |
| Edison Cobalt Corp |
| Cobalt Blue Holdings |
Edison Cobalt and Cobalt Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edison Cobalt and Cobalt Blue
The main advantage of trading using opposite Edison Cobalt and Cobalt Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt 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.| Edison Cobalt vs. Baroyeca Gold Silver | Edison Cobalt vs. Aurelia Metals Limited | Edison Cobalt vs. China Rare Earth | Edison Cobalt vs. Champion Bear Resources |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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