Correlation Between Tomra Systems and BluMetric Environmental
Can any of the company-specific risk be diversified away by investing in both Tomra Systems 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 Tomra Systems and BluMetric Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tomra Systems ASA and BluMetric Environmental, you can compare the effects of market volatilities on Tomra Systems 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 Tomra Systems with a short position of BluMetric Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tomra Systems and BluMetric Environmental.
Diversification Opportunities for Tomra Systems and BluMetric Environmental
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tomra and BluMetric is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tomra Systems ASA and BluMetric Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BluMetric Environmental and Tomra Systems 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 Tomra Systems ASA 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 Tomra Systems i.e., Tomra Systems and BluMetric Environmental go up and down completely randomly.
Pair Corralation between Tomra Systems and BluMetric Environmental
Assuming the 90 days horizon Tomra Systems ASA is expected to under-perform the BluMetric Environmental. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tomra Systems ASA is 1.61 times less risky than BluMetric Environmental. The pink sheet trades about -0.14 of its potential returns per unit of risk. The BluMetric Environmental is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 55.00 in BluMetric Environmental on August 25, 2024 and sell it today you would earn a total of 5.00 from holding BluMetric Environmental or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tomra Systems ASA vs. BluMetric Environmental
Performance |
| Timeline |
| Tomra Systems ASA |
| BluMetric Environmental |
Tomra Systems and BluMetric Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tomra Systems and BluMetric Environmental
The main advantage of trading using opposite Tomra Systems and BluMetric Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tomra Systems 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.| Tomra Systems vs. Waste Connections | Tomra Systems vs. Clean Harbors | Tomra Systems vs. Casella Waste Systems | Tomra Systems vs. Waste Management |
| BluMetric Environmental vs. Agilyx AS | BluMetric Environmental vs. BacTech Environmental | BluMetric Environmental vs. EcoPlus | BluMetric Environmental vs. Majic Wheels Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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