Correlation Between Blue Square and YH Dimri
Can any of the company-specific risk be diversified away by investing in both Blue Square and YH Dimri 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 Square and YH Dimri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Square Real and YH Dimri Construction, you can compare the effects of market volatilities on Blue Square and YH Dimri 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 Square with a short position of YH Dimri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Square and YH Dimri.
Diversification Opportunities for Blue Square and YH Dimri
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blue and DIMRI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Blue Square Real and YH Dimri Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YH Dimri Construction and Blue 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 Blue Square Real are associated (or correlated) with YH Dimri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YH Dimri Construction has no effect on the direction of Blue Square i.e., Blue Square and YH Dimri go up and down completely randomly.
Pair Corralation between Blue Square and YH Dimri
Assuming the 90 days trading horizon Blue Square Real is expected to generate 1.99 times more return on investment than YH Dimri. However, Blue Square is 1.99 times more volatile than YH Dimri Construction. It trades about 0.17 of its potential returns per unit of risk. YH Dimri Construction is currently generating about -0.11 per unit of risk. If you would invest 2,470,981 in Blue Square Real on January 25, 2024 and sell it today you would earn a total of 227,019 from holding Blue Square Real or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Square Real vs. YH Dimri Construction
Performance |
| Timeline |
| Blue Square Real |
| YH Dimri Construction |
Blue Square and YH Dimri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Square and YH Dimri
The main advantage of trading using opposite Blue Square and YH Dimri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Square position performs unexpectedly, YH Dimri 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 YH Dimri will offset losses from the drop in YH Dimri's long position.The idea behind Blue Square Real and YH Dimri Construction 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |