Correlation Between Tangerine Equity and Bloom Select

Can any of the company-specific risk be diversified away by investing in both Tangerine Equity and Bloom Select 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 Tangerine Equity and Bloom Select into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tangerine Equity Growth and Bloom Select Income, you can compare the effects of market volatilities on Tangerine Equity and Bloom Select 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 Tangerine Equity with a short position of Bloom Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tangerine Equity and Bloom Select.

Diversification Opportunities for Tangerine Equity and Bloom Select

-0.51

Correlation Coefficient

Tangerine Equity  Bloom Select

Excellent diversification

The 3 months correlation between Tangerine and Bloom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tangerine Equity Growth and Bloom Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Select Income and Tangerine Equity 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 Tangerine Equity Growth are associated (or correlated) with Bloom Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Select Income has no effect on the direction of Tangerine Equity i.e., Tangerine Equity and Bloom Select go up and down completely randomly.

Pair Corralation between Tangerine Equity and Bloom Select

Assuming the 90 days trading horizon Tangerine Equity Growth is expected to under-perform the Bloom Select. But the fund apears to be less risky and, when comparing its historical volatility, Tangerine Equity Growth is 1.61 times less risky than Bloom Select. The fund trades about -0.17 of its potential returns per unit of risk. The Bloom Select Income is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  781.00  in Bloom Select Income on October 5, 2024 and sell it today you would lose (1.00) from holding Bloom Select Income or give up 0.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	68.42%
Values	Daily Returns

Tangerine Equity Growth  vs.  Bloom Select Income

Tangerine Equity Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tangerine Equity Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Tangerine Equity is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bloom Select Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bloom Select Income has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tangerine Equity and Bloom Select

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

The idea behind Tangerine Equity Growth and Bloom Select Income 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.