Correlation Between Blue Moon and Altair International

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

By analyzing existing cross correlation between Blue Moon Metals and Altair International Corp, you can compare the effects of market volatilities on Blue Moon and Altair International 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 Moon with a short position of Altair International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Moon and Altair International.

Diversification Opportunities for Blue Moon and Altair International

-0.11

Correlation Coefficient

Blue Moon  Altair International

Good diversification

The 3 months correlation between Blue and Altair is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and Altair International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair International Corp and Blue Moon 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 Moon Metals are associated (or correlated) with Altair International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair International Corp has no effect on the direction of Blue Moon i.e., Blue Moon and Altair International go up and down completely randomly.

Pair Corralation between Blue Moon and Altair International

Assuming the 90 days horizon Blue Moon Metals is expected to generate 5.52 times more return on investment than Altair International. However, Blue Moon is 5.52 times more volatile than Altair International Corp. It trades about 0.1 of its potential returns per unit of risk. Altair International Corp is currently generating about 0.06 per unit of risk. If you would invest  11.00  in Blue Moon Metals on September 23, 2024 and sell it today you would earn a total of  14.00  from holding Blue Moon Metals or generate 127.27% return on investment over 90 days.

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

Blue Moon Metals  vs.  Altair International Corp

Blue Moon Metals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Altair International Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altair International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Altair International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blue Moon and Altair International

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

The idea behind Blue Moon Metals and Altair International Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.