Correlation Between Blue Moon and Caravelle International

Can any of the company-specific risk be diversified away by investing in both Blue Moon and Caravelle International 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 Caravelle International 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 Caravelle International Group, you can compare the effects of market volatilities on Blue Moon and Caravelle International 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 Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Moon and Caravelle International.

Diversification Opportunities for Blue Moon and Caravelle International

0.29

Correlation Coefficient

Blue Moon  Caravelle International

Modest diversification

The 3 months correlation between Blue and Caravelle is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Blue Moon i.e., Blue Moon and Caravelle International go up and down completely randomly.

Pair Corralation between Blue Moon and Caravelle International

If you would invest  184.00  in Caravelle International Group on October 3, 2024 and sell it today you would earn a total of  149.00  from holding Caravelle International Group or generate 80.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Blue Moon Metals  vs.  Caravelle International Group

Blue Moon Metals

Risk-Adjusted Performance

5 of 100

Modest

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

Caravelle International

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Moon and Caravelle International

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

The idea behind Blue Moon Metals and Caravelle International 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.