Correlation Between Blue Capital and Reservoir Media

Can any of the company-specific risk be diversified away by investing in both Blue Capital and Reservoir Media 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 Reservoir Media 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 Reservoir Media, you can compare the effects of market volatilities on Blue Capital and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Capital and Reservoir Media.

Diversification Opportunities for Blue Capital and Reservoir Media

0.49

Correlation Coefficient

Blue Capital  Reservoir Media

Very weak diversification

The 3 months correlation between Blue and Reservoir is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blue Capital Reinsurance and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Blue Capital i.e., Blue Capital and Reservoir Media go up and down completely randomly.

Pair Corralation between Blue Capital and Reservoir Media

If you would invest  675.00  in Reservoir Media on October 7, 2024 and sell it today you would earn a total of  174.00  from holding Reservoir Media or generate 25.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.44%
Values	Daily Returns

Blue Capital Reinsurance  vs.  Reservoir Media

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Reservoir Media

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reservoir Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Blue Capital and Reservoir Media

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

The idea behind Blue Capital Reinsurance and Reservoir Media 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.