Correlation Between BLUERUSH Media and Edgewater Wireless

Can any of the company-specific risk be diversified away by investing in both BLUERUSH Media and Edgewater Wireless 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 BLUERUSH Media and Edgewater Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BLUERUSH Media Group and Edgewater Wireless Systems, you can compare the effects of market volatilities on BLUERUSH Media and Edgewater Wireless 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 BLUERUSH Media with a short position of Edgewater Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUERUSH Media and Edgewater Wireless.

Diversification Opportunities for BLUERUSH Media and Edgewater Wireless

-0.39

Correlation Coefficient

BLUERUSH Media  Edgewater Wireless

Very good diversification

The 3 months correlation between BLUERUSH and Edgewater is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BLUERUSH Media Group and Edgewater Wireless Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewater Wireless and BLUERUSH Media 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 BLUERUSH Media Group are associated (or correlated) with Edgewater Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewater Wireless has no effect on the direction of BLUERUSH Media i.e., BLUERUSH Media and Edgewater Wireless go up and down completely randomly.

Pair Corralation between BLUERUSH Media and Edgewater Wireless

If you would invest  4.13  in Edgewater Wireless Systems on October 24, 2024 and sell it today you would earn a total of  0.57  from holding Edgewater Wireless Systems or generate 13.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

BLUERUSH Media Group  vs.  Edgewater Wireless Systems

BLUERUSH Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLUERUSH Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BLUERUSH Media is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Edgewater Wireless

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewater Wireless Systems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Edgewater Wireless reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BLUERUSH Media and Edgewater Wireless

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

The idea behind BLUERUSH Media Group and Edgewater Wireless Systems 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.