Correlation Between Bluebik Group and Chamni Eye

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

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

Diversification Opportunities for Bluebik Group and Chamni Eye

0.72

Correlation Coefficient

Bluebik Group  Chamni Eye

Poor diversification

The 3 months correlation between Bluebik and Chamni is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bluebik Group PCL and Chamni Eye PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chamni Eye PCL and Bluebik Group 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 Bluebik Group PCL are associated (or correlated) with Chamni Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chamni Eye PCL has no effect on the direction of Bluebik Group i.e., Bluebik Group and Chamni Eye go up and down completely randomly.

Pair Corralation between Bluebik Group and Chamni Eye

Assuming the 90 days trading horizon Bluebik Group PCL is expected to under-perform the Chamni Eye. But the stock apears to be less risky and, when comparing its historical volatility, Bluebik Group PCL is 1.09 times less risky than Chamni Eye. The stock trades about -0.17 of its potential returns per unit of risk. The Chamni Eye PCL is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  255.00  in Chamni Eye PCL on December 30, 2024 and sell it today you would lose (29.00) from holding Chamni Eye PCL or give up 11.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Bluebik Group PCL  vs.  Chamni Eye PCL

Bluebik Group PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bluebik Group PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Chamni Eye PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chamni Eye PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bluebik Group and Chamni Eye

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

The idea behind Bluebik Group PCL and Chamni Eye PCL 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.