Correlation Between Real Good and Blue Star
Can any of the company-specific risk be diversified away by investing in both Real Good and Blue Star 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 Real Good and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and Blue Star Foods, you can compare the effects of market volatilities on Real Good and Blue Star 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 Real Good with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and Blue Star.
Diversification Opportunities for Real Good and Blue Star
Very poor diversification
The 3 months correlation between Real and Blue is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and Blue Star Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Foods and Real Good 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 Real Good Food are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Foods has no effect on the direction of Real Good i.e., Real Good and Blue Star go up and down completely randomly.
Pair Corralation between Real Good and Blue Star
Considering the 90-day investment horizon Real Good Food is expected to generate 0.71 times more return on investment than Blue Star. However, Real Good Food is 1.4 times less risky than Blue Star. It trades about -0.06 of its potential returns per unit of risk. Blue Star Foods is currently generating about -0.11 per unit of risk. If you would invest 525.00 in Real Good Food on August 27, 2024 and sell it today you would lose (499.00) from holding Real Good Food or give up 95.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Good Food vs. Blue Star Foods
Performance |
| Timeline |
| Real Good Food |
| Blue Star Foods |
Real Good and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and Blue Star
The main advantage of trading using opposite Real Good and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good position performs unexpectedly, Blue Star 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 Star will offset losses from the drop in Blue Star's long position.| Real Good vs. Bellring Brands LLC | Real Good vs. Ingredion Incorporated | Real Good vs. Nomad Foods | Real Good vs. Simply Good Foods |
| Blue Star vs. Better Choice | Blue Star vs. Stryve Foods | Blue Star vs. BioAdaptives | Blue Star vs. Beyond Oil |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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