Correlation Between Blender Financial and Arena Star

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

By analyzing existing cross correlation between Blender Financial Technologies and Arena Star Group, you can compare the effects of market volatilities on Blender Financial and Arena Star 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 Blender Financial with a short position of Arena Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blender Financial and Arena Star.

Diversification Opportunities for Blender Financial and Arena Star

0.4

Correlation Coefficient

Blender Financial  Arena Star

Very weak diversification

The 3 months correlation between Blender and Arena is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blender Financial Technologies and Arena Star Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Star Group and Blender Financial 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 Blender Financial Technologies are associated (or correlated) with Arena Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Star Group has no effect on the direction of Blender Financial i.e., Blender Financial and Arena Star go up and down completely randomly.

Pair Corralation between Blender Financial and Arena Star

Assuming the 90 days trading horizon Blender Financial is expected to generate 1.19 times less return on investment than Arena Star. In addition to that, Blender Financial is 1.59 times more volatile than Arena Star Group. It trades about 0.17 of its total potential returns per unit of risk. Arena Star Group is currently generating about 0.32 per unit of volatility. If you would invest  20,350  in Arena Star Group on September 16, 2024 and sell it today you would earn a total of  2,650  from holding Arena Star Group or generate 13.02% return on investment over 90 days.

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

Blender Financial Technologies  vs.  Arena Star Group

Blender Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blender Financial Technologies 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Arena Star Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arena Star Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Arena Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blender Financial and Arena Star

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

The idea behind Blender Financial Technologies and Arena Star Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.