Correlation Between Tether Gold and BLZ

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

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

Diversification Opportunities for Tether Gold and BLZ

-0.79

Correlation Coefficient

Tether Gold  BLZ

Pay attention - limited upside

The 3 months correlation between Tether and BLZ is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tether Gold and BLZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLZ and Tether Gold 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 Tether Gold are associated (or correlated) with BLZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLZ has no effect on the direction of Tether Gold i.e., Tether Gold and BLZ go up and down completely randomly.

Pair Corralation between Tether Gold and BLZ

Assuming the 90 days trading horizon Tether Gold is expected to generate 0.07 times more return on investment than BLZ. However, Tether Gold is 15.37 times less risky than BLZ. It trades about 0.28 of its potential returns per unit of risk. BLZ is currently generating about 0.0 per unit of risk. If you would invest  262,338  in Tether Gold on December 29, 2024 and sell it today you would earn a total of  46,242  from holding Tether Gold or generate 17.63% return on investment over 90 days.

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

Tether Gold  vs.  BLZ

Tether Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tether Gold are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Tether Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

BLZ

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BLZ is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tether Gold and BLZ

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

The idea behind Tether Gold and BLZ 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.