Correlation Between Sage Potash and Blue Sky

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sage Potash and Blue Sky 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 Sage Potash and Blue Sky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Potash Corp and Blue Sky Uranium, you can compare the effects of market volatilities on Sage Potash and Blue Sky 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 Sage Potash with a short position of Blue Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Potash and Blue Sky.

Diversification Opportunities for Sage Potash and Blue Sky

SageBlueDiversified AwaySageBlueDiversified Away100%
-0.42
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Sage Potash and Blue Sky

Assuming the 90 days trading horizon Sage Potash Corp is expected to under-perform the Blue Sky. But the stock apears to be less risky and, when comparing its historical volatility, Sage Potash Corp is 1.19 times less risky than Blue Sky. The stock trades about -0.01 of its potential returns per unit of risk. The Blue Sky Uranium is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Blue Sky Uranium on September 13, 2024 and sell it today you would earn a total of  2.00  from holding Blue Sky Uranium or generate 50.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sage Potash Corp  vs.  Blue Sky Uranium

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -20-1001020
JavaScript chart by amCharts 3.21.15SAGE BSK
       Timeline  
Sage Potash Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sage Potash Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Sage Potash is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.170.180.190.20.210.220.230.24
Blue Sky Uranium 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Sky Uranium are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blue Sky showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.040.0450.050.0550.06

Sage Potash and Blue Sky Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-21.24-15.91-10.58-5.240.015.2510.5815.9221.26 0.00600.00650.00700.00750.00800.00850.0090
JavaScript chart by amCharts 3.21.15SAGE BSK
       Returns  

Pair Trading with Sage Potash and Blue Sky

The main advantage of trading using opposite Sage Potash and Blue Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Potash position performs unexpectedly, Blue Sky 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 Blue Sky will offset losses from the drop in Blue Sky's long position.
The idea behind Sage Potash Corp and Blue Sky Uranium 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Transaction History
View history of all your transactions and understand their impact on performance