Correlation Between BC Craft and Blueberries Medical

Can any of the company-specific risk be diversified away by investing in both BC Craft and Blueberries Medical 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 BC Craft and Blueberries Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BC Craft Supply and Blueberries Medical Corp, you can compare the effects of market volatilities on BC Craft and Blueberries Medical 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 BC Craft with a short position of Blueberries Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Craft and Blueberries Medical.

Diversification Opportunities for BC Craft and Blueberries Medical

0.7

Correlation Coefficient

BC Craft  Blueberries Medical

Poor diversification

The 3 months correlation between CRFTF and Blueberries is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BC Craft Supply and Blueberries Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueberries Medical Corp and BC Craft 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 BC Craft Supply are associated (or correlated) with Blueberries Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueberries Medical Corp has no effect on the direction of BC Craft i.e., BC Craft and Blueberries Medical go up and down completely randomly.

Pair Corralation between BC Craft and Blueberries Medical

Assuming the 90 days horizon BC Craft is expected to generate 2.0 times less return on investment than Blueberries Medical. In addition to that, BC Craft is 1.66 times more volatile than Blueberries Medical Corp. It trades about 0.01 of its total potential returns per unit of risk. Blueberries Medical Corp is currently generating about 0.04 per unit of volatility. If you would invest  2.00  in Blueberries Medical Corp on October 9, 2024 and sell it today you would lose (1.01) from holding Blueberries Medical Corp or give up 50.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BC Craft Supply  vs.  Blueberries Medical Corp

BC Craft Supply

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BC Craft Supply 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Blueberries Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blueberries Medical Corp 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BC Craft and Blueberries Medical

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

The idea behind BC Craft Supply and Blueberries Medical Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.