Correlation Between Mogo and BlackBerry

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

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

Diversification Opportunities for Mogo and BlackBerry

0.26

Correlation Coefficient

Mogo  BlackBerry

Modest diversification

The 3 months correlation between Mogo and BlackBerry is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mogo Inc and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry and Mogo 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 Mogo Inc are associated (or correlated) with BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Mogo i.e., Mogo and BlackBerry go up and down completely randomly.

Pair Corralation between Mogo and BlackBerry

Given the investment horizon of 90 days Mogo Inc is expected to under-perform the BlackBerry. In addition to that, Mogo is 1.2 times more volatile than BlackBerry. It trades about -0.01 of its total potential returns per unit of risk. BlackBerry is currently generating about 0.02 per unit of volatility. If you would invest  381.00  in BlackBerry on October 4, 2024 and sell it today you would lose (2.50) from holding BlackBerry or give up 0.66% of portfolio value over 90 days.

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

Mogo Inc  vs.  BlackBerry

Mogo Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mogo Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Mogo displayed solid returns over the last few months and may actually be approaching a breakup point.

BlackBerry

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackBerry are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, BlackBerry sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mogo and BlackBerry

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

The idea behind Mogo Inc and BlackBerry 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.