Correlation Between Blue Star and LeanLife Health

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

Diversification Opportunities for Blue Star and LeanLife Health

0.0

Correlation Coefficient

Blue Star  LeanLife Health

Pay attention - limited upside

The 3 months correlation between Blue and LeanLife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and LeanLife Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeanLife Health 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 LeanLife Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeanLife Health has no effect on the direction of Blue Star i.e., Blue Star and LeanLife Health go up and down completely randomly.

Pair Corralation between Blue Star and LeanLife Health

If you would invest  0.50  in LeanLife Health on October 3, 2024 and sell it today you would earn a total of  0.00  from holding LeanLife Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.25%
Values	Daily Returns

Blue Star Foods  vs.  LeanLife Health

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.

LeanLife Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LeanLife Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, LeanLife Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blue Star and LeanLife Health

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

The idea behind Blue Star Foods and LeanLife Health 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.