Correlation Between Blender Financial and Ratio Oil

Can any of the company-specific risk be diversified away by investing in both Blender Financial and Ratio Oil 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 Ratio Oil 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 Ratio Oil Explorations, you can compare the effects of market volatilities on Blender Financial and Ratio Oil 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 Ratio Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blender Financial and Ratio Oil.

Diversification Opportunities for Blender Financial and Ratio Oil

-0.87

Correlation Coefficient

Blender Financial  Ratio Oil

Pay attention - limited upside

The 3 months correlation between Blender and Ratio is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Blender Financial Technologies and Ratio Oil Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratio Oil Explorations 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 Ratio Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratio Oil Explorations has no effect on the direction of Blender Financial i.e., Blender Financial and Ratio Oil go up and down completely randomly.

Pair Corralation between Blender Financial and Ratio Oil

Assuming the 90 days trading horizon Blender Financial Technologies is expected to under-perform the Ratio Oil. In addition to that, Blender Financial is 2.4 times more volatile than Ratio Oil Explorations. It trades about -0.11 of its total potential returns per unit of risk. Ratio Oil Explorations is currently generating about 0.31 per unit of volatility. If you would invest  28,210  in Ratio Oil Explorations on September 13, 2024 and sell it today you would earn a total of  7,120  from holding Ratio Oil Explorations or generate 25.24% return on investment over 90 days.

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

Blender Financial Technologies  vs.  Ratio Oil Explorations

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.

Ratio Oil Explorations

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ratio Oil Explorations are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ratio Oil sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blender Financial and Ratio Oil

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

The idea behind Blender Financial Technologies and Ratio Oil 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.