Correlation Between Blue Moon and Carbon Revolution

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

By analyzing existing cross correlation between Blue Moon Metals and Carbon Revolution Public, you can compare the effects of market volatilities on Blue Moon and Carbon Revolution 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 Blue Moon with a short position of Carbon Revolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Moon and Carbon Revolution.

Diversification Opportunities for Blue Moon and Carbon Revolution

-0.03

Correlation Coefficient

Blue Moon  Carbon Revolution

Good diversification

The 3 months correlation between Blue and Carbon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and Carbon Revolution Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Revolution Public and Blue Moon 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 Blue Moon Metals are associated (or correlated) with Carbon Revolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Revolution Public has no effect on the direction of Blue Moon i.e., Blue Moon and Carbon Revolution go up and down completely randomly.

Pair Corralation between Blue Moon and Carbon Revolution

If you would invest  2.55  in Carbon Revolution Public on October 4, 2024 and sell it today you would earn a total of  3.08  from holding Carbon Revolution Public or generate 120.78% return on investment over 90 days.

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

Blue Moon Metals  vs.  Carbon Revolution Public

Blue Moon Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Carbon Revolution Public

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Revolution Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Carbon Revolution showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Moon and Carbon Revolution

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

The idea behind Blue Moon Metals and Carbon Revolution Public 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.