Correlation Between Deluxe and Blue Sphere

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Deluxe and Blue Sphere 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 Deluxe and Blue Sphere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Blue Sphere Corp, you can compare the effects of market volatilities on Deluxe and Blue Sphere 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 Deluxe with a short position of Blue Sphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Blue Sphere.

Diversification Opportunities for Deluxe and Blue Sphere

DeluxeBlueDiversified AwayDeluxeBlueDiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Deluxe and Blue is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Blue Sphere Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sphere Corp and Deluxe 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 Deluxe are associated (or correlated) with Blue Sphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sphere Corp has no effect on the direction of Deluxe i.e., Deluxe and Blue Sphere go up and down completely randomly.

Pair Corralation between Deluxe and Blue Sphere

Considering the 90-day investment horizon Deluxe is expected to under-perform the Blue Sphere. But the stock apears to be less risky and, when comparing its historical volatility, Deluxe is 153.43 times less risky than Blue Sphere. The stock trades about -0.15 of its potential returns per unit of risk. The Blue Sphere Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Blue Sphere Corp on November 15, 2024 and sell it today you would lose (0.01) from holding Blue Sphere Corp or give up 100.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.31%
ValuesDaily Returns

Deluxe  vs.  Blue Sphere Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 20406080100
JavaScript chart by amCharts 3.21.15DLX BLSP
       Timeline  
Deluxe 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Deluxe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb18192021222324
Blue Sphere Corp 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Sphere Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Blue Sphere reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb

Deluxe and Blue Sphere Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.28-3.21-2.13-1.060.01.012.033.054.07 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15DLX BLSP
       Returns  

Pair Trading with Deluxe and Blue Sphere

The main advantage of trading using opposite Deluxe and Blue Sphere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe position performs unexpectedly, Blue Sphere 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 Blue Sphere will offset losses from the drop in Blue Sphere's long position.
The idea behind Deluxe and Blue Sphere 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.
Check out your portfolio center.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Commodity Directory
Find actively traded commodities issued by global exchanges
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Equity Valuation
Check real value of public entities based on technical and fundamental data
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities