Correlation Between Stantec and BluMetric Environmental
Can any of the company-specific risk be diversified away by investing in both Stantec and BluMetric Environmental 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 Stantec and BluMetric Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stantec and BluMetric Environmental, you can compare the effects of market volatilities on Stantec and BluMetric Environmental 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 Stantec with a short position of BluMetric Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stantec and BluMetric Environmental.
Diversification Opportunities for Stantec and BluMetric Environmental
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stantec and BluMetric is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stantec and BluMetric Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BluMetric Environmental and Stantec 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 Stantec are associated (or correlated) with BluMetric Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BluMetric Environmental has no effect on the direction of Stantec i.e., Stantec and BluMetric Environmental go up and down completely randomly.
Pair Corralation between Stantec and BluMetric Environmental
Assuming the 90 days trading horizon Stantec is expected to generate 2.1 times less return on investment than BluMetric Environmental. But when comparing it to its historical volatility, Stantec is 3.94 times less risky than BluMetric Environmental. It trades about 0.08 of its potential returns per unit of risk. BluMetric Environmental is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 91.00 in BluMetric Environmental on November 5, 2024 and sell it today you would earn a total of 2.00 from holding BluMetric Environmental or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stantec vs. BluMetric Environmental
Performance |
| Timeline |
| Stantec |
| BluMetric Environmental |
Stantec and BluMetric Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stantec and BluMetric Environmental
The main advantage of trading using opposite Stantec and BluMetric Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stantec position performs unexpectedly, BluMetric Environmental 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 BluMetric Environmental will offset losses from the drop in BluMetric Environmental's long position.| Stantec vs. Toromont Industries | Stantec vs. WSP Global | Stantec vs. Ritchie Bros Auctioneers | Stantec vs. Stella Jones |
| BluMetric Environmental vs. BioRem Inc | BluMetric Environmental vs. CHAR Technologies | BluMetric Environmental vs. Current Water Technologies | BluMetric Environmental vs. Imaflex |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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