Can any of the company-specific risk be diversified away by investing in both Blue Hat and Corsair Gaming 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 Hat and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Hat Interactive and Corsair Gaming, you can compare the effects of market volatilities on Blue Hat and Corsair Gaming 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 Hat with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Hat and Corsair Gaming.
Diversification Opportunities for Blue Hat and Corsair Gaming
The 3 months correlation between Blue and Corsair is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blue Hat Interactive and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and Blue Hat 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 Hat Interactive are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Blue Hat i.e., Blue Hat and Corsair Gaming go up and down completely randomly.
Pair Corralation between Blue Hat and Corsair Gaming
Given the investment horizon of 90 days Blue Hat Interactive is expected to generate 0.97 times more return on investment than Corsair Gaming. However, Blue Hat Interactive is 1.03 times less risky than Corsair Gaming. It trades about 0.05 of its potential returns per unit of risk. Corsair Gaming is currently generating about 0.02 per unit of risk. If you would invest 108.00 in Blue Hat Interactive on March 6, 2024 and sell it today you would earn a total of 2.00 from holding Blue Hat Interactive or generate 1.85% return on investment over 90 days.
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 comparatively stable basic indicators, Blue Hat is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Over the last 90 days Corsair Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Corsair Gaming is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.