Correlation Between Bip Investment and Cobalt Power

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

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

Diversification Opportunities for Bip Investment and Cobalt Power

-0.86

Correlation Coefficient

Bip Investment  Cobalt Power

Pay attention - limited upside

The 3 months correlation between Bip and Cobalt is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bip Investment Corp and Cobalt Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Power Group and Bip Investment 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 Bip Investment Corp are associated (or correlated) with Cobalt Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Power Group has no effect on the direction of Bip Investment i.e., Bip Investment and Cobalt Power go up and down completely randomly.

Pair Corralation between Bip Investment and Cobalt Power

If you would invest  2.00  in Cobalt Power Group on October 21, 2024 and sell it today you would earn a total of  1.00  from holding Cobalt Power Group or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	26.32%
Values	Daily Returns

Bip Investment Corp  vs.  Cobalt Power Group

Bip Investment Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bip Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Bip Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cobalt Power Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cobalt Power Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bip Investment and Cobalt Power

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

The idea behind Bip Investment Corp and Cobalt Power Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.