Correlation Between Azure Holding and Bellatora

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

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

Diversification Opportunities for Azure Holding and Bellatora

0.13

Correlation Coefficient

Azure Holding  Bellatora

Average diversification

The 3 months correlation between Azure and Bellatora is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Bellatora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellatora and Azure Holding 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 Azure Holding Group are associated (or correlated) with Bellatora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellatora has no effect on the direction of Azure Holding i.e., Azure Holding and Bellatora go up and down completely randomly.

Pair Corralation between Azure Holding and Bellatora

Given the investment horizon of 90 days Azure Holding Group is expected to generate 1.0 times more return on investment than Bellatora. However, Azure Holding Group is 1.0 times less risky than Bellatora. It trades about 0.15 of its potential returns per unit of risk. Bellatora is currently generating about 0.09 per unit of risk. If you would invest  11.00  in Azure Holding Group on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Azure Holding Group or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Azure Holding Group  vs.  Bellatora

Azure Holding Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bellatora

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bellatora are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Bellatora reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azure Holding and Bellatora

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

The idea behind Azure Holding Group and Bellatora 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.