Correlation Between Stellar and Blue Moon
Can any of the company-specific risk be diversified away by investing in both Stellar and Blue Moon 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 Stellar and Blue Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Blue Moon Zinc, you can compare the effects of market volatilities on Stellar and Blue Moon 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 Stellar with a short position of Blue Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Blue Moon.
Diversification Opportunities for Stellar and Blue Moon
Very weak diversification
The 3 months correlation between Stellar and Blue is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Blue Moon Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Zinc and Stellar 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 Stellar are associated (or correlated) with Blue Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Moon Zinc has no effect on the direction of Stellar i.e., Stellar and Blue Moon go up and down completely randomly.
Pair Corralation between Stellar and Blue Moon
If you would invest 42.00 in Stellar on October 14, 2024 and sell it today you would earn a total of 3.00 from holding Stellar or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Stellar vs. Blue Moon Zinc
Performance |
| Timeline |
| Stellar |
| Blue Moon Zinc |
Stellar and Blue Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Blue Moon
The main advantage of trading using opposite Stellar and Blue Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Blue Moon 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 Moon will offset losses from the drop in Blue Moon's long position.The idea behind Stellar and Blue Moon Zinc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Blue Moon vs. Transatlantic Mining Corp | Blue Moon vs. Opus One Resources | Blue Moon vs. Grosvenor Resource 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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