Correlation Between Blue Star and Smart For

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

Diversification Opportunities for Blue Star and Smart For

0.86

Correlation Coefficient

Blue Star  Smart For

Very poor diversification

The 3 months correlation between Blue and Smart is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Smart for Life, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart for Life, 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 Smart For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart for Life, has no effect on the direction of Blue Star i.e., Blue Star and Smart For go up and down completely randomly.

Pair Corralation between Blue Star and Smart For

Given the investment horizon of 90 days Blue Star Foods is expected to generate 0.59 times more return on investment than Smart For. However, Blue Star Foods is 1.7 times less risky than Smart For. It trades about -0.12 of its potential returns per unit of risk. Smart for Life, is currently generating about -0.21 per unit of risk. If you would invest  252.00  in Blue Star Foods on September 3, 2024 and sell it today you would lose (220.00) from holding Blue Star Foods or give up 87.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	64.0%
Values	Daily Returns

Blue Star Foods  vs.  Smart for Life,

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Smart for Life,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart for Life, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Blue Star and Smart For

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

The idea behind Blue Star Foods and Smart for Life, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.