Correlation Between Bloomsbury Publishing and Edinburgh Investment

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

By analyzing existing cross correlation between Bloomsbury Publishing Plc and Edinburgh Investment Trust, you can compare the effects of market volatilities on Bloomsbury Publishing and Edinburgh Investment 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 Bloomsbury Publishing with a short position of Edinburgh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Edinburgh Investment.

Diversification Opportunities for Bloomsbury Publishing and Edinburgh Investment

-0.63

Correlation Coefficient

Bloomsbury Publishing  Edinburgh Investment

Excellent diversification

The 3 months correlation between Bloomsbury and Edinburgh is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Edinburgh Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Investment and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with Edinburgh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Investment has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and Edinburgh Investment go up and down completely randomly.

Pair Corralation between Bloomsbury Publishing and Edinburgh Investment

Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the Edinburgh Investment. In addition to that, Bloomsbury Publishing is 6.47 times more volatile than Edinburgh Investment Trust. It trades about -0.05 of its total potential returns per unit of risk. Edinburgh Investment Trust is currently generating about 0.24 per unit of volatility. If you would invest  74,557  in Edinburgh Investment Trust on April 25, 2025 and sell it today you would earn a total of  5,543  from holding Edinburgh Investment Trust or generate 7.43% return on investment over 90 days.

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

Bloomsbury Publishing Plc  vs.  Edinburgh Investment Trust

Bloomsbury Publishing Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bloomsbury Publishing Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Edinburgh Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Edinburgh Investment Trust are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Edinburgh Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bloomsbury Publishing and Edinburgh Investment

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

The idea behind Bloomsbury Publishing Plc and Edinburgh Investment Trust 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.