Correlation Between Tattooed Chef and Blue Star
Can any of the company-specific risk be diversified away by investing in both Tattooed Chef 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 Tattooed Chef and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tattooed Chef and Blue Star Foods, you can compare the effects of market volatilities on Tattooed Chef 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 Tattooed Chef with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tattooed Chef and Blue Star.
Diversification Opportunities for Tattooed Chef and Blue Star
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tattooed and Blue is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tattooed Chef 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 Tattooed Chef 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 Tattooed Chef 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 Tattooed Chef i.e., Tattooed Chef and Blue Star go up and down completely randomly.
Pair Corralation between Tattooed Chef and Blue Star
Given the investment horizon of 90 days Tattooed Chef is expected to under-perform the Blue Star. But the stock apears to be less risky and, when comparing its historical volatility, Tattooed Chef is 1.16 times less risky than Blue Star. The stock trades about -0.24 of its potential returns per unit of risk. The Blue Star Foods is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 35,700 in Blue Star Foods on August 27, 2024 and sell it today you would lose (35,677) from holding Blue Star Foods or give up 99.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 25.49% |
| Values | Daily Returns |
Tattooed Chef vs. Blue Star Foods
Performance |
| Timeline |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Blue Star Foods |
Tattooed Chef and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tattooed Chef and Blue Star
The main advantage of trading using opposite Tattooed Chef and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tattooed Chef 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.| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star Foods |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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