Correlation Between Blueberries Medical and Pure Extracts

Can any of the company-specific risk be diversified away by investing in both Blueberries Medical and Pure Extracts 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 Blueberries Medical and Pure Extracts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blueberries Medical Corp and Pure Extracts Technologies, you can compare the effects of market volatilities on Blueberries Medical and Pure Extracts 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 Blueberries Medical with a short position of Pure Extracts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueberries Medical and Pure Extracts.

Diversification Opportunities for Blueberries Medical and Pure Extracts

-0.09

Correlation Coefficient

Blueberries Medical  Pure Extracts

Good diversification

The 3 months correlation between Blueberries and Pure is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Blueberries Medical Corp and Pure Extracts Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Extracts Techno and Blueberries Medical 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 Blueberries Medical Corp are associated (or correlated) with Pure Extracts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Extracts Techno has no effect on the direction of Blueberries Medical i.e., Blueberries Medical and Pure Extracts go up and down completely randomly.

Pair Corralation between Blueberries Medical and Pure Extracts

Assuming the 90 days horizon Blueberries Medical Corp is expected to generate 0.93 times more return on investment than Pure Extracts. However, Blueberries Medical Corp is 1.07 times less risky than Pure Extracts. It trades about 0.05 of its potential returns per unit of risk. Pure Extracts Technologies is currently generating about 0.03 per unit of risk. If you would invest  2.41  in Blueberries Medical Corp on September 7, 2024 and sell it today you would lose (1.48) from holding Blueberries Medical Corp or give up 61.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.25%
Values	Daily Returns

Blueberries Medical Corp  vs.  Pure Extracts Technologies

Blueberries Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blueberries Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blueberries Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pure Extracts Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pure Extracts Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pure Extracts is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blueberries Medical and Pure Extracts

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

The idea behind Blueberries Medical Corp and Pure Extracts Technologies 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.