Correlation Between Generic Engineering and Blue Coast
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By analyzing existing cross correlation between Generic Engineering Construction and Blue Coast Hotels, you can compare the effects of market volatilities on Generic Engineering and Blue Coast 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 Generic Engineering with a short position of Blue Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Engineering and Blue Coast.
Diversification Opportunities for Generic Engineering and Blue Coast
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Generic and Blue is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Generic Engineering Constructi and Blue Coast Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Coast Hotels and Generic Engineering 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 Generic Engineering Construction are associated (or correlated) with Blue Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Coast Hotels has no effect on the direction of Generic Engineering i.e., Generic Engineering and Blue Coast go up and down completely randomly.
Pair Corralation between Generic Engineering and Blue Coast
Assuming the 90 days trading horizon Generic Engineering Construction is expected to under-perform the Blue Coast. In addition to that, Generic Engineering is 4.34 times more volatile than Blue Coast Hotels. It trades about -0.07 of its total potential returns per unit of risk. Blue Coast Hotels is currently generating about -0.22 per unit of volatility. If you would invest 998.00 in Blue Coast Hotels on September 4, 2024 and sell it today you would lose (30.00) from holding Blue Coast Hotels or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generic Engineering Constructi vs. Blue Coast Hotels
Performance |
| Timeline |
| Generic Engineering |
| Blue Coast Hotels |
Generic Engineering and Blue Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Engineering and Blue Coast
The main advantage of trading using opposite Generic Engineering and Blue Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Engineering position performs unexpectedly, Blue Coast 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 Coast will offset losses from the drop in Blue Coast's long position.The idea behind Generic Engineering Construction and Blue Coast Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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