Correlation Between Big Time and Blur

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

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

Diversification Opportunities for Big Time and Blur

0.99

Correlation Coefficient

Big Time  Blur

No risk reduction

The 3 months correlation between Big and Blur is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Big Time and Blur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blur and Big Time 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 Big Time are associated (or correlated) with Blur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blur has no effect on the direction of Big Time i.e., Big Time and Blur go up and down completely randomly.

Pair Corralation between Big Time and Blur

Assuming the 90 days trading horizon Big Time is expected to under-perform the Blur. In addition to that, Big Time is 1.11 times more volatile than Blur. It trades about -0.21 of its total potential returns per unit of risk. Blur is currently generating about -0.18 per unit of volatility. If you would invest  24.00  in Blur on December 30, 2024 and sell it today you would lose (14.00) from holding Blur or give up 58.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Big Time  vs.  Blur

Big Time

Risk-Adjusted Performance

Very Weak

Over the last 90 days Big Time has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Big Time shareholders.

Blur

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blur has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Blur shareholders.

Pair Trading with Big Time and Blur

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

The idea behind Big Time and Blur 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 CEOs Directory module to screen CEOs from public companies around the world.