Correlation Between Blackstar Enterprise and Cal Bay

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

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

Diversification Opportunities for Blackstar Enterprise and Cal Bay

0.0

Correlation Coefficient

Blackstar Enterprise  Cal Bay

Pay attention - limited upside

The 3 months correlation between Blackstar and Cal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackstar Enterprise Group and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and Blackstar Enterprise 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 Blackstar Enterprise Group are associated (or correlated) with Cal Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of Blackstar Enterprise i.e., Blackstar Enterprise and Cal Bay go up and down completely randomly.

Pair Corralation between Blackstar Enterprise and Cal Bay

Given the investment horizon of 90 days Blackstar Enterprise is expected to generate 3.19 times less return on investment than Cal Bay. But when comparing it to its historical volatility, Blackstar Enterprise Group is 2.74 times less risky than Cal Bay. It trades about 0.09 of its potential returns per unit of risk. Cal Bay Intl is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Cal Bay Intl on October 9, 2024 and sell it today you would lose (0.01) from holding Cal Bay Intl or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackstar Enterprise Group  vs.  Cal Bay Intl

Blackstar Enterprise

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Blackstar Enterprise Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cal Bay Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cal Bay is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Blackstar Enterprise and Cal Bay

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

The idea behind Blackstar Enterprise Group and Cal Bay Intl 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.