Correlation Between Blue Star and BioForce Nanosciences

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

By analyzing existing cross correlation between Blue Star Foods and BioForce Nanosciences Holdings, you can compare the effects of market volatilities on Blue Star and BioForce Nanosciences 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 Star with a short position of BioForce Nanosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and BioForce Nanosciences.

Diversification Opportunities for Blue Star and BioForce Nanosciences

0.55

Correlation Coefficient

Blue Star  BioForce Nanosciences

Very weak diversification

The 3 months correlation between Blue and BioForce is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and BioForce Nanosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioForce Nanosciences and Blue Star 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 Star Foods are associated (or correlated) with BioForce Nanosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioForce Nanosciences has no effect on the direction of Blue Star i.e., Blue Star and BioForce Nanosciences go up and down completely randomly.

Pair Corralation between Blue Star and BioForce Nanosciences

Given the investment horizon of 90 days Blue Star Foods is expected to generate 1.39 times more return on investment than BioForce Nanosciences. However, Blue Star is 1.39 times more volatile than BioForce Nanosciences Holdings. It trades about -0.07 of its potential returns per unit of risk. BioForce Nanosciences Holdings is currently generating about -0.33 per unit of risk. If you would invest  28.00  in Blue Star Foods on October 3, 2024 and sell it today you would lose (13.00) from holding Blue Star Foods or give up 46.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Blue Star Foods  vs.  BioForce Nanosciences Holdings

Blue Star Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

BioForce Nanosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioForce Nanosciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Blue Star and BioForce Nanosciences

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

The idea behind Blue Star Foods and BioForce Nanosciences Holdings 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.