Correlation Between Victory Square and Blue Hat

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

By analyzing existing cross correlation between Victory Square Technologies and Blue Hat Interactive, you can compare the effects of market volatilities on Victory Square and Blue Hat 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 Victory Square with a short position of Blue Hat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Square and Blue Hat.

Diversification Opportunities for Victory Square and Blue Hat

0.16

Correlation Coefficient

Victory Square  Blue Hat

Average diversification

The 3 months correlation between Victory and Blue is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Victory Square Technologies and Blue Hat Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Hat Interactive and Victory Square 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 Victory Square Technologies are associated (or correlated) with Blue Hat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Hat Interactive has no effect on the direction of Victory Square i.e., Victory Square and Blue Hat go up and down completely randomly.

Pair Corralation between Victory Square and Blue Hat

Assuming the 90 days horizon Victory Square Technologies is expected to generate 0.69 times more return on investment than Blue Hat. However, Victory Square Technologies is 1.45 times less risky than Blue Hat. It trades about -0.01 of its potential returns per unit of risk. Blue Hat Interactive is currently generating about -0.13 per unit of risk. If you would invest  19.00  in Victory Square Technologies on December 28, 2024 and sell it today you would lose (6.00) from holding Victory Square Technologies or give up 31.58% of portfolio value over 90 days.

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

Victory Square Technologies  vs.  Blue Hat Interactive

Victory Square Techn

Risk-Adjusted Performance

Very Weak

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

Blue Hat Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Hat Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Victory Square and Blue Hat

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

The idea behind Victory Square Technologies and Blue Hat Interactive 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.