Correlation Between BluMetric Environmental and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both BluMetric Environmental and Tomra Systems 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 BluMetric Environmental and Tomra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BluMetric Environmental and Tomra Systems ASA, you can compare the effects of market volatilities on BluMetric Environmental and Tomra Systems 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 BluMetric Environmental with a short position of Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of BluMetric Environmental and Tomra Systems.
Diversification Opportunities for BluMetric Environmental and Tomra Systems
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BluMetric and Tomra is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding BluMetric Environmental and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA and BluMetric Environmental 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 BluMetric Environmental are associated (or correlated) with Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of BluMetric Environmental i.e., BluMetric Environmental and Tomra Systems go up and down completely randomly.
Pair Corralation between BluMetric Environmental and Tomra Systems
Assuming the 90 days horizon BluMetric Environmental is expected to generate 2.41 times more return on investment than Tomra Systems. However, BluMetric Environmental is 2.41 times more volatile than Tomra Systems ASA. It trades about 0.12 of its potential returns per unit of risk. Tomra Systems ASA is currently generating about 0.03 per unit of risk. If you would invest 29.00 in BluMetric Environmental on September 3, 2024 and sell it today you would earn a total of 30.00 from holding BluMetric Environmental or generate 103.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BluMetric Environmental vs. Tomra Systems ASA
Performance |
| Timeline |
| BluMetric Environmental |
| Tomra Systems ASA |
BluMetric Environmental and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BluMetric Environmental and Tomra Systems
The main advantage of trading using opposite BluMetric Environmental and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BluMetric Environmental position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| BluMetric Environmental vs. Republic Services | BluMetric Environmental vs. Waste Connections | BluMetric Environmental vs. Clean Harbors | BluMetric Environmental vs. Gfl Environmental Holdings |
| Tomra Systems vs. Republic Services | Tomra Systems vs. Waste Connections | Tomra Systems vs. Clean Harbors | Tomra Systems vs. Gfl Environmental 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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