Correlation Between Blue Moon and Choice Properties

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

By analyzing existing cross correlation between Blue Moon Zinc and Choice Properties Real, you can compare the effects of market volatilities on Blue Moon and Choice Properties 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 Blue Moon with a short position of Choice Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Moon and Choice Properties.

Diversification Opportunities for Blue Moon and Choice Properties

-0.77

Correlation Coefficient

Blue Moon  Choice Properties

Pay attention - limited upside

The 3 months correlation between Blue and Choice is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Zinc and Choice Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Properties Real and Blue Moon 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 Blue Moon Zinc are associated (or correlated) with Choice Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Properties Real has no effect on the direction of Blue Moon i.e., Blue Moon and Choice Properties go up and down completely randomly.

Pair Corralation between Blue Moon and Choice Properties

Assuming the 90 days trading horizon Blue Moon Zinc is expected to generate 1.41 times more return on investment than Choice Properties. However, Blue Moon is 1.41 times more volatile than Choice Properties Real. It trades about 0.29 of its potential returns per unit of risk. Choice Properties Real is currently generating about -0.14 per unit of risk. If you would invest  33.00  in Blue Moon Zinc on September 23, 2024 and sell it today you would earn a total of  3.00  from holding Blue Moon Zinc or generate 9.09% return on investment over 90 days.

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

Blue Moon Zinc  vs.  Choice Properties Real

Blue Moon Zinc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Zinc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blue Moon showed solid returns over the last few months and may actually be approaching a breakup point.

Choice Properties Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choice Properties Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blue Moon and Choice Properties

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

The idea behind Blue Moon Zinc and Choice Properties Real 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.