Correlation Between Empire State and Bluestone Resources
Can any of the company-specific risk be diversified away by investing in both Empire State and Bluestone Resources 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 Empire State and Bluestone Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Bluestone Resources, you can compare the effects of market volatilities on Empire State and Bluestone Resources 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 Empire State with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Bluestone Resources.
Diversification Opportunities for Empire State and Bluestone Resources
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Bluestone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Empire State 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 Empire State Realty are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Empire State i.e., Empire State and Bluestone Resources go up and down completely randomly.
Pair Corralation between Empire State and Bluestone Resources
Given the investment horizon of 90 days Empire State is expected to generate 1.73 times less return on investment than Bluestone Resources. But when comparing it to its historical volatility, Empire State Realty is 4.08 times less risky than Bluestone Resources. It trades about 0.06 of its potential returns per unit of risk. Bluestone Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Bluestone Resources on August 30, 2024 and sell it today you would lose (13.00) from holding Bluestone Resources or give up 37.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.72% |
| Values | Daily Returns |
Empire State Realty vs. Bluestone Resources
Performance |
| Timeline |
| Empire State Realty |
| Bluestone Resources |
Empire State and Bluestone Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Bluestone Resources
The main advantage of trading using opposite Empire State and Bluestone Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Bluestone Resources 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 Bluestone Resources will offset losses from the drop in Bluestone Resources' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Bluestone Resources vs. Minnova Corp | Bluestone Resources vs. Argo Gold | Bluestone Resources vs. Advance Gold Corp | Bluestone Resources vs. Blue Star Gold |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |