Correlation Between NYSE Composite and Blue Dolphin
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Blue Dolphin 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 NYSE Composite and Blue Dolphin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Blue Dolphin Energy, you can compare the effects of market volatilities on NYSE Composite and Blue Dolphin 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 NYSE Composite with a short position of Blue Dolphin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Blue Dolphin.
Diversification Opportunities for NYSE Composite and Blue Dolphin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Blue is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Blue Dolphin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Dolphin Energy and NYSE Composite 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 NYSE Composite are associated (or correlated) with Blue Dolphin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Dolphin Energy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Blue Dolphin go up and down completely randomly.
Pair Corralation between NYSE Composite and Blue Dolphin
Assuming the 90 days trading horizon NYSE Composite is expected to generate 25.11 times less return on investment than Blue Dolphin. But when comparing it to its historical volatility, NYSE Composite is 10.72 times less risky than Blue Dolphin. It trades about 0.08 of its potential returns per unit of risk. Blue Dolphin Energy is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 108.00 in Blue Dolphin Energy on August 31, 2024 and sell it today you would earn a total of 498.00 from holding Blue Dolphin Energy or generate 461.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.11% |
| Values | Daily Returns |
NYSE Composite vs. Blue Dolphin Energy
Performance |
| Timeline |
NYSE Composite and Blue Dolphin Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Blue Dolphin Energy
Pair trading matchups for Blue Dolphin
Pair Trading with NYSE Composite and Blue Dolphin
The main advantage of trading using opposite NYSE Composite and Blue Dolphin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Blue Dolphin 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 Dolphin will offset losses from the drop in Blue Dolphin's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Blue Dolphin vs. Aemetis | Blue Dolphin vs. PBF Energy | Blue Dolphin vs. Clean Energy Fuels | Blue Dolphin vs. Par Pacific Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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