Correlation Between Turning Point and Blue Star
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Blue Star Foods, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Blue Star.
Diversification Opportunities for Turning Point and Blue Star
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Turning and Blue is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Blue Star go up and down completely randomly.
Pair Corralation between Turning Point and Blue Star
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.37 times more return on investment than Blue Star. However, Turning Point Brands is 2.71 times less risky than Blue Star. It trades about 0.56 of its potential returns per unit of risk. Blue Star Foods is currently generating about -0.35 per unit of risk. If you would invest 4,673 in Turning Point Brands on August 28, 2024 and sell it today you would earn a total of 1,438 from holding Turning Point Brands or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Blue Star Foods
Performance |
| Timeline |
| Turning Point Brands |
| Blue Star Foods |
Turning Point and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Blue Star
The main advantage of trading using opposite Turning Point and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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