Correlation Between Blue Star and Thor Explorations

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

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

Diversification Opportunities for Blue Star and Thor Explorations

-0.03

Correlation Coefficient

Blue Star  Thor Explorations

Good diversification

The 3 months correlation between Blue and Thor is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Gold and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations and Blue Star 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 Star Gold are associated (or correlated) with Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Blue Star i.e., Blue Star and Thor Explorations go up and down completely randomly.

Pair Corralation between Blue Star and Thor Explorations

If you would invest  20.00  in Thor Explorations on September 4, 2024 and sell it today you would earn a total of  1.00  from holding Thor Explorations or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Blue Star Gold  vs.  Thor Explorations

Blue Star Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Thor Explorations

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Explorations are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Thor Explorations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Star and Thor Explorations

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

The idea behind Blue Star Gold and Thor Explorations 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.