Correlation Between Blue Whale and Golden Star

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

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

Diversification Opportunities for Blue Whale and Golden Star

0.42

Correlation Coefficient

Blue Whale  Golden Star

Very weak diversification

The 3 months correlation between Blue and Golden is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Blue Whale Acquisition and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition and Blue Whale 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 Whale Acquisition are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Blue Whale i.e., Blue Whale and Golden Star go up and down completely randomly.

Pair Corralation between Blue Whale and Golden Star

If you would invest  1,105  in Golden Star Acquisition on September 27, 2024 and sell it today you would earn a total of  44.00  from holding Golden Star Acquisition or generate 3.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Blue Whale Acquisition  vs.  Golden Star Acquisition

Blue Whale Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Whale Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Blue Whale is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Golden Star Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blue Whale and Golden Star

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

The idea behind Blue Whale Acquisition and Golden Star Acquisition 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.