Correlation Between Asara Resources and Bluebet Holdings

Can any of the company-specific risk be diversified away by investing in both Asara Resources and Bluebet Holdings 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 Asara Resources and Bluebet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asara Resources and Bluebet Holdings, you can compare the effects of market volatilities on Asara Resources and Bluebet Holdings 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 Asara Resources with a short position of Bluebet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asara Resources and Bluebet Holdings.

Diversification Opportunities for Asara Resources and Bluebet Holdings

-0.11

Correlation Coefficient

Asara Resources  Bluebet Holdings

Good diversification

The 3 months correlation between Asara and Bluebet is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Asara Resources and Bluebet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebet Holdings and Asara Resources 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 Asara Resources are associated (or correlated) with Bluebet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebet Holdings has no effect on the direction of Asara Resources i.e., Asara Resources and Bluebet Holdings go up and down completely randomly.

Pair Corralation between Asara Resources and Bluebet Holdings

Assuming the 90 days trading horizon Asara Resources is expected to generate 1.37 times more return on investment than Bluebet Holdings. However, Asara Resources is 1.37 times more volatile than Bluebet Holdings. It trades about 0.07 of its potential returns per unit of risk. Bluebet Holdings is currently generating about 0.04 per unit of risk. If you would invest  1.20  in Asara Resources on October 19, 2024 and sell it today you would earn a total of  1.00  from holding Asara Resources or generate 83.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Asara Resources  vs.  Bluebet Holdings

Asara Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asara Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bluebet Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bluebet Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bluebet Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asara Resources and Bluebet Holdings

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

The idea behind Asara Resources and Bluebet Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.