Correlation Between O I and Blue Bird
Can any of the company-specific risk be diversified away by investing in both O I and Blue Bird 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 O I and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between O I Glass and Blue Bird Corp, you can compare the effects of market volatilities on O I and Blue Bird 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 O I with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of O I and Blue Bird.
Diversification Opportunities for O I and Blue Bird
Pay attention - limited upside
The 3 months correlation between O I and Blue is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp and O I 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 O I Glass are associated (or correlated) with Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of O I i.e., O I and Blue Bird go up and down completely randomly.
Pair Corralation between O I and Blue Bird
Allowing for the 90-day total investment horizon O I Glass is expected to under-perform the Blue Bird. But the stock apears to be less risky and, when comparing its historical volatility, O I Glass is 1.42 times less risky than Blue Bird. The stock trades about -0.37 of its potential returns per unit of risk. The Blue Bird Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,876 in Blue Bird Corp on March 14, 2024 and sell it today you would earn a total of 721.00 from holding Blue Bird Corp or generate 14.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
O I Glass vs. Blue Bird Corp
Performance |
Timeline |
O I Glass |
Blue Bird Corp |
O I and Blue Bird Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with O I and Blue Bird
The main advantage of trading using opposite O I and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O I position performs unexpectedly, Blue Bird 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 Bird will offset losses from the drop in Blue Bird's long position.O I vs. Karat Packaging | O I vs. Reynolds Consumer Products | O I vs. Pactiv Evergreen | O I vs. Packaging Corp of |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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