Correlation Between Blue Capital and 01 Communique

Can any of the company-specific risk be diversified away by investing in both Blue Capital and 01 Communique 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 Blue Capital and 01 Communique into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Capital Reinsurance and 01 Communique Laboratory, you can compare the effects of market volatilities on Blue Capital and 01 Communique 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 Blue Capital with a short position of 01 Communique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Capital and 01 Communique.

Diversification Opportunities for Blue Capital and 01 Communique

-0.25

Correlation Coefficient

Blue Capital  01 Communique

Very good diversification

The 3 months correlation between Blue and OONEF is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Blue Capital Reinsurance and 01 Communique Laboratory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 01 Communique Laboratory and Blue Capital 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 Blue Capital Reinsurance are associated (or correlated) with 01 Communique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 01 Communique Laboratory has no effect on the direction of Blue Capital i.e., Blue Capital and 01 Communique go up and down completely randomly.

Pair Corralation between Blue Capital and 01 Communique

If you would invest  5.00  in 01 Communique Laboratory on September 23, 2024 and sell it today you would earn a total of  11.00  from holding 01 Communique Laboratory or generate 220.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Blue Capital Reinsurance  vs.  01 Communique Laboratory

Blue Capital Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

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

01 Communique Laboratory

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Capital and 01 Communique

The main advantage of trading using opposite Blue Capital and 01 Communique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Capital position performs unexpectedly, 01 Communique 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 01 Communique will offset losses from the drop in 01 Communique's long position.

The idea behind Blue Capital Reinsurance and 01 Communique Laboratory 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.