Correlation Between Precious Metals and Bloom Select

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

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

Diversification Opportunities for Precious Metals and Bloom Select

0.42

Correlation Coefficient

Precious Metals  Bloom Select

Very weak diversification

The 3 months correlation between Precious and Bloom is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and Bloom Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Select Income and Precious 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 Precious Metals And are associated (or correlated) with Bloom Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Select Income has no effect on the direction of Precious Metals i.e., Precious Metals and Bloom Select go up and down completely randomly.

Pair Corralation between Precious Metals and Bloom Select

Assuming the 90 days trading horizon Precious Metals And is expected to generate 2.7 times more return on investment than Bloom Select. However, Precious Metals is 2.7 times more volatile than Bloom Select Income. It trades about -0.06 of its potential returns per unit of risk. Bloom Select Income is currently generating about -0.45 per unit of risk. If you would invest  183.00  in Precious Metals And on October 7, 2024 and sell it today you would lose (5.00) from holding Precious Metals And or give up 2.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.89%
Values	Daily Returns

Precious Metals And  vs.  Bloom Select Income

Precious Metals And

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Precious Metals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Bloom Select Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bloom Select Income has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Precious Metals and Bloom Select

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

The idea behind Precious Metals And and Bloom Select Income 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.