Correlation Between Bimini Capital and Elysee Development

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

By analyzing existing cross correlation between Bimini Capital Management and Elysee Development Corp, you can compare the effects of market volatilities on Bimini Capital and Elysee Development 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 Bimini Capital with a short position of Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bimini Capital and Elysee Development.

Diversification Opportunities for Bimini Capital and Elysee Development

0.28

Correlation Coefficient

Bimini Capital  Elysee Development

Modest diversification

The 3 months correlation between Bimini and Elysee is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bimini Capital Management and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp and Bimini 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 Bimini Capital Management are associated (or correlated) with Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of Bimini Capital i.e., Bimini Capital and Elysee Development go up and down completely randomly.

Pair Corralation between Bimini Capital and Elysee Development

Given the investment horizon of 90 days Bimini Capital Management is expected to generate 1.34 times more return on investment than Elysee Development. However, Bimini Capital is 1.34 times more volatile than Elysee Development Corp. It trades about 0.11 of its potential returns per unit of risk. Elysee Development Corp is currently generating about 0.08 per unit of risk. If you would invest  102.00  in Bimini Capital Management on December 29, 2024 and sell it today you would earn a total of  33.00  from holding Bimini Capital Management or generate 32.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Bimini Capital Management  vs.  Elysee Development Corp

Bimini Capital Management

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bimini Capital Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Bimini Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Elysee Development Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elysee Development Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elysee Development reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bimini Capital and Elysee Development

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

The idea behind Bimini Capital Management and Elysee Development Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.