Correlation Between AUPU Home and Blue Sail

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

By analyzing existing cross correlation between AUPU Home Style and Blue Sail Medical, you can compare the effects of market volatilities on AUPU Home and Blue Sail 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 AUPU Home with a short position of Blue Sail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUPU Home and Blue Sail.

Diversification Opportunities for AUPU Home and Blue Sail

0.93

Correlation Coefficient

AUPU Home  Blue Sail

Almost no diversification

The 3 months correlation between AUPU and Blue is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AUPU Home Style and Blue Sail Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sail Medical and AUPU Home 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 AUPU Home Style are associated (or correlated) with Blue Sail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sail Medical has no effect on the direction of AUPU Home i.e., AUPU Home and Blue Sail go up and down completely randomly.

Pair Corralation between AUPU Home and Blue Sail

Assuming the 90 days trading horizon AUPU Home Style is expected to generate 1.24 times more return on investment than Blue Sail. However, AUPU Home is 1.24 times more volatile than Blue Sail Medical. It trades about 0.03 of its potential returns per unit of risk. Blue Sail Medical is currently generating about -0.03 per unit of risk. If you would invest  898.00  in AUPU Home Style on September 26, 2024 and sell it today you would earn a total of  211.00  from holding AUPU Home Style or generate 23.5% return on investment over 90 days.

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

AUPU Home Style  vs.  Blue Sail Medical

AUPU Home Style

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUPU Home Style are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AUPU Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Blue Sail Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Sail Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Blue Sail sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AUPU Home and Blue Sail

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

The idea behind AUPU Home Style and Blue Sail Medical 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.