Correlation Between Figaro Coffee and Bloomberry Resorts

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

By analyzing existing cross correlation between Figaro Coffee Group and Bloomberry Resorts Corp, you can compare the effects of market volatilities on Figaro Coffee and Bloomberry Resorts 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 Figaro Coffee with a short position of Bloomberry Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Bloomberry Resorts.

Diversification Opportunities for Figaro Coffee and Bloomberry Resorts

-0.42

Correlation Coefficient

Figaro Coffee  Bloomberry Resorts

Very good diversification

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

Pair Corralation between Figaro Coffee and Bloomberry Resorts

Assuming the 90 days trading horizon Figaro Coffee is expected to generate 25.97 times less return on investment than Bloomberry Resorts. But when comparing it to its historical volatility, Figaro Coffee Group is 3.73 times less risky than Bloomberry Resorts. It trades about 0.02 of its potential returns per unit of risk. Bloomberry Resorts Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Bloomberry Resorts Corp on April 20, 2025 and sell it today you would earn a total of  170.00  from holding Bloomberry Resorts Corp or generate 61.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Figaro Coffee Group  vs.  Bloomberry Resorts Corp

Figaro Coffee Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Figaro Coffee Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Figaro Coffee is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bloomberry Resorts Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bloomberry Resorts Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bloomberry Resorts reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Figaro Coffee and Bloomberry Resorts

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

The idea behind Figaro Coffee Group and Bloomberry Resorts 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.