Correlation Between Blue Moon and 337932AH0

Can any of the company-specific risk be diversified away by investing in both Blue Moon and 337932AH0 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 Moon and 337932AH0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Moon Metals and FIRSTENERGY P 39, you can compare the effects of market volatilities on Blue Moon and 337932AH0 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 Moon with a short position of 337932AH0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Moon and 337932AH0.

Diversification Opportunities for Blue Moon and 337932AH0

-0.44

Correlation Coefficient

Blue Moon  337932AH0

Very good diversification

The 3 months correlation between Blue and 337932AH0 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and FIRSTENERGY P 39 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRSTENERGY P and Blue Moon 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 Moon Metals are associated (or correlated) with 337932AH0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRSTENERGY P has no effect on the direction of Blue Moon i.e., Blue Moon and 337932AH0 go up and down completely randomly.

Pair Corralation between Blue Moon and 337932AH0

Assuming the 90 days horizon Blue Moon Metals is expected to under-perform the 337932AH0. In addition to that, Blue Moon is 3.52 times more volatile than FIRSTENERGY P 39. It trades about -0.1 of its total potential returns per unit of risk. FIRSTENERGY P 39 is currently generating about -0.24 per unit of volatility. If you would invest  9,745  in FIRSTENERGY P 39 on September 16, 2024 and sell it today you would lose (446.00) from holding FIRSTENERGY P 39 or give up 4.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Blue Moon Metals  vs.  FIRSTENERGY P 39

Blue Moon Metals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

FIRSTENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIRSTENERGY P 39 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 337932AH0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blue Moon and 337932AH0

The main advantage of trading using opposite Blue Moon and 337932AH0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Moon position performs unexpectedly, 337932AH0 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 337932AH0 will offset losses from the drop in 337932AH0's long position.

The idea behind Blue Moon Metals and FIRSTENERGY P 39 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.