Correlation Between Blueberries Medical and Procyon

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

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

Diversification Opportunities for Blueberries Medical and Procyon

-0.47

Correlation Coefficient

Blueberries Medical  Procyon

Very good diversification

The 3 months correlation between Blueberries and Procyon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Blueberries Medical Corp and Procyon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procyon and Blueberries Medical 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 Blueberries Medical Corp are associated (or correlated) with Procyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procyon has no effect on the direction of Blueberries Medical i.e., Blueberries Medical and Procyon go up and down completely randomly.

Pair Corralation between Blueberries Medical and Procyon

Assuming the 90 days horizon Blueberries Medical Corp is expected to under-perform the Procyon. In addition to that, Blueberries Medical is 1.47 times more volatile than Procyon. It trades about -0.06 of its total potential returns per unit of risk. Procyon is currently generating about -0.01 per unit of volatility. If you would invest  20.00  in Procyon on October 8, 2024 and sell it today you would lose (1.00) from holding Procyon or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Blueberries Medical Corp  vs.  Procyon

Blueberries Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blueberries Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Procyon

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Blueberries Medical and Procyon

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

The idea behind Blueberries Medical Corp and Procyon 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.