Correlation Between South Star and Bluestone Resources
Can any of the company-specific risk be diversified away by investing in both South Star and Bluestone Resources 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 South Star and Bluestone Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and Bluestone Resources, you can compare the effects of market volatilities on South Star and Bluestone Resources 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 South Star with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Bluestone Resources.
Diversification Opportunities for South Star and Bluestone Resources
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between South and Bluestone is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and South Star 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 South Star Battery are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of South Star i.e., South Star and Bluestone Resources go up and down completely randomly.
Pair Corralation between South Star and Bluestone Resources
Assuming the 90 days horizon South Star is expected to generate 10.04 times less return on investment than Bluestone Resources. But when comparing it to its historical volatility, South Star Battery is 2.18 times less risky than Bluestone Resources. It trades about 0.01 of its potential returns per unit of risk. Bluestone Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Bluestone Resources on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Bluestone Resources or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.33% |
| Values | Daily Returns |
South Star Battery vs. Bluestone Resources
Performance |
| Timeline |
| South Star Battery |
| Bluestone Resources |
South Star and Bluestone Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Bluestone Resources
The main advantage of trading using opposite South Star and Bluestone Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Bluestone Resources 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 Bluestone Resources will offset losses from the drop in Bluestone Resources' long position.| South Star vs. Norra Metals Corp | South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Mundoro Capital |
| Bluestone Resources vs. Norra Metals Corp | Bluestone Resources vs. ZincX Resources Corp | Bluestone Resources vs. Nuinsco Resources Limited | Bluestone Resources vs. Mundoro Capital |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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