Correlation Between Peer To and Blackbird Plc

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

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

Diversification Opportunities for Peer To and Blackbird Plc

-0.29

Correlation Coefficient

Peer To  Blackbird Plc

Very good diversification

The 3 months correlation between Peer and Blackbird is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Peer To Peer and Blackbird plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbird plc and Peer To 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 Peer To Peer are associated (or correlated) with Blackbird Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbird plc has no effect on the direction of Peer To i.e., Peer To and Blackbird Plc go up and down completely randomly.

Pair Corralation between Peer To and Blackbird Plc

Given the investment horizon of 90 days Peer To Peer is expected to generate 3.79 times more return on investment than Blackbird Plc. However, Peer To is 3.79 times more volatile than Blackbird plc. It trades about 0.12 of its potential returns per unit of risk. Blackbird plc is currently generating about 0.0 per unit of risk. If you would invest  0.02  in Peer To Peer on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Peer To Peer or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Peer To Peer  vs.  Blackbird plc

Peer To Peer

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peer To Peer are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Peer To reported solid returns over the last few months and may actually be approaching a breakup point.

Blackbird plc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Peer To and Blackbird Plc

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

The idea behind Peer To Peer and Blackbird plc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.