Correlation Between Bloomberry Resorts and Figaro Coffee

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

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

Diversification Opportunities for Bloomberry Resorts and Figaro Coffee

-0.08

Correlation Coefficient

Bloomberry Resorts  Figaro Coffee

Good diversification

The 3 months correlation between Bloomberry and Figaro is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bloomberry Resorts Corp and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group and Bloomberry Resorts 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 Bloomberry Resorts Corp are associated (or correlated) with Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of Bloomberry Resorts i.e., Bloomberry Resorts and Figaro Coffee go up and down completely randomly.

Pair Corralation between Bloomberry Resorts and Figaro Coffee

Assuming the 90 days trading horizon Bloomberry Resorts Corp is expected to under-perform the Figaro Coffee. But the stock apears to be less risky and, when comparing its historical volatility, Bloomberry Resorts Corp is 1.29 times less risky than Figaro Coffee. The stock trades about -0.03 of its potential returns per unit of risk. The Figaro Coffee Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  77.00  in Figaro Coffee Group on September 4, 2024 and sell it today you would earn a total of  7.00  from holding Figaro Coffee Group or generate 9.09% return on investment over 90 days.

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

Bloomberry Resorts Corp  vs.  Figaro Coffee Group

Bloomberry Resorts Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bloomberry Resorts Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Figaro Coffee Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Figaro Coffee Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Figaro Coffee may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bloomberry Resorts and Figaro Coffee

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

The idea behind Bloomberry Resorts Corp and Figaro Coffee 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.