Correlation Between Heliostar Metals and Bluestone Resources

Can any of the company-specific risk be diversified away by investing in both Heliostar Metals and Bluestone Resources 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 Heliostar Metals and Bluestone Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heliostar Metals and Bluestone Resources, you can compare the effects of market volatilities on Heliostar Metals and Bluestone Resources 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 Heliostar Metals with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heliostar Metals and Bluestone Resources.

Diversification Opportunities for Heliostar Metals and Bluestone Resources

-0.14

Correlation Coefficient

Heliostar Metals  Bluestone Resources

Good diversification

The 3 months correlation between Heliostar and Bluestone is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Heliostar Metals and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Heliostar Metals 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 Heliostar Metals are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Heliostar Metals i.e., Heliostar Metals and Bluestone Resources go up and down completely randomly.

Pair Corralation between Heliostar Metals and Bluestone Resources

Assuming the 90 days horizon Heliostar Metals is expected to generate 1.94 times more return on investment than Bluestone Resources. However, Heliostar Metals is 1.94 times more volatile than Bluestone Resources. It trades about 0.1 of its potential returns per unit of risk. Bluestone Resources is currently generating about 0.01 per unit of risk. If you would invest  46.00  in Heliostar Metals on November 29, 2024 and sell it today you would earn a total of  11.00  from holding Heliostar Metals or generate 23.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.67%
Values	Daily Returns

Heliostar Metals  vs.  Bluestone Resources

Heliostar Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heliostar Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Heliostar Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Bluestone Resources

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Heliostar Metals and Bluestone Resources

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

The idea behind Heliostar Metals and Bluestone Resources 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.