Correlation Between CBIZ and Blue Water

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

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

Diversification Opportunities for CBIZ and Blue Water

-0.07

Correlation Coefficient

CBIZ  Blue Water

Good diversification

The 3 months correlation between CBIZ and Blue is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Blue Water Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Water Ventures and CBIZ 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 CBIZ Inc are associated (or correlated) with Blue Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Water Ventures has no effect on the direction of CBIZ i.e., CBIZ and Blue Water go up and down completely randomly.

Pair Corralation between CBIZ and Blue Water

Considering the 90-day investment horizon CBIZ Inc is expected to generate 0.14 times more return on investment than Blue Water. However, CBIZ Inc is 6.99 times less risky than Blue Water. It trades about 0.1 of its potential returns per unit of risk. Blue Water Ventures is currently generating about -0.18 per unit of risk. If you would invest  7,315  in CBIZ Inc on September 3, 2024 and sell it today you would earn a total of  863.00  from holding CBIZ Inc or generate 11.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

CBIZ Inc  vs.  Blue Water Ventures

CBIZ Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blue Water Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Water Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with CBIZ and Blue Water

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

The idea behind CBIZ Inc and Blue Water Ventures 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.