Correlation Between Avalon Holdings and BluMetric Environmental

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

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

Diversification Opportunities for Avalon Holdings and BluMetric Environmental

0.0

Correlation Coefficient

Avalon Holdings  BluMetric Environmental

Pay attention - limited upside

The 3 months correlation between Avalon and BluMetric is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avalon Holdings and BluMetric Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BluMetric Environmental and Avalon Holdings 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 Avalon Holdings are associated (or correlated) with BluMetric Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BluMetric Environmental has no effect on the direction of Avalon Holdings i.e., Avalon Holdings and BluMetric Environmental go up and down completely randomly.

Pair Corralation between Avalon Holdings and BluMetric Environmental

If you would invest  276.00  in Avalon Holdings on December 2, 2024 and sell it today you would earn a total of  51.00  from holding Avalon Holdings or generate 18.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Avalon Holdings  vs.  BluMetric Environmental

Avalon Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Avalon Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Avalon Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BluMetric Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days BluMetric Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BluMetric Environmental is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Avalon Holdings and BluMetric Environmental

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

The idea behind Avalon Holdings and BluMetric Environmental 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.