Correlation Between Blue Lagoon and Becle SA
Can any of the company-specific risk be diversified away by investing in both Blue Lagoon and Becle SA 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 Blue Lagoon and Becle SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Lagoon Resources and Becle SA de, you can compare the effects of market volatilities on Blue Lagoon and Becle SA 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 Blue Lagoon with a short position of Becle SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Lagoon and Becle SA.
Diversification Opportunities for Blue Lagoon and Becle SA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and Becle is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Blue Lagoon Resources and Becle SA de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SA de and Blue Lagoon 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 Blue Lagoon Resources are associated (or correlated) with Becle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SA de has no effect on the direction of Blue Lagoon i.e., Blue Lagoon and Becle SA go up and down completely randomly.
Pair Corralation between Blue Lagoon and Becle SA
Assuming the 90 days horizon Blue Lagoon Resources is expected to generate 2.02 times more return on investment than Becle SA. However, Blue Lagoon is 2.02 times more volatile than Becle SA de. It trades about 0.11 of its potential returns per unit of risk. Becle SA de is currently generating about -0.02 per unit of risk. If you would invest 6.70 in Blue Lagoon Resources on July 10, 2024 and sell it today you would earn a total of 2.60 from holding Blue Lagoon Resources or generate 38.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Blue Lagoon Resources vs. Becle SA de
Performance |
Timeline |
Blue Lagoon Resources |
Becle SA de |
Blue Lagoon and Becle SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blue Lagoon and Becle SA
The main advantage of trading using opposite Blue Lagoon and Becle SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Lagoon position performs unexpectedly, Becle SA 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 Becle SA will offset losses from the drop in Becle SA's long position.Blue Lagoon vs. Red Pine Exploration | Blue Lagoon vs. Grande Portage Resources | Blue Lagoon vs. White Gold Corp | Blue Lagoon vs. Sitka Gold Corp |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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