Correlation Between Altair International and Blue Moon

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

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

Diversification Opportunities for Altair International and Blue Moon

-0.17

Correlation Coefficient

Altair International  Blue Moon

Good diversification

The 3 months correlation between Altair and Blue is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Altair International Corp and Blue Moon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Metals and Altair International 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 Altair International Corp 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 Metals has no effect on the direction of Altair International i.e., Altair International and Blue Moon go up and down completely randomly.

Pair Corralation between Altair International and Blue Moon

Given the investment horizon of 90 days Altair International is expected to generate 13.04 times less return on investment than Blue Moon. In addition to that, Altair International is 3.0 times more volatile than Blue Moon Metals. It trades about 0.0 of its total potential returns per unit of risk. Blue Moon Metals is currently generating about 0.1 per unit of volatility. If you would invest  20.00  in Blue Moon Metals on September 22, 2024 and sell it today you would earn a total of  5.00  from holding Blue Moon Metals or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Altair International Corp  vs.  Blue Moon Metals

Altair International Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altair International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Altair International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Blue Moon Metals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altair International and Blue Moon

The main advantage of trading using opposite Altair International and Blue Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altair International 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 Altair International Corp and Blue Moon Metals 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.