Correlation Between GRIN and Bluzelle
Can any of the company-specific risk be diversified away by investing in both GRIN and Bluzelle 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 GRIN and Bluzelle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRIN and Bluzelle, you can compare the effects of market volatilities on GRIN and Bluzelle 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 GRIN with a short position of Bluzelle. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIN and Bluzelle.
Diversification Opportunities for GRIN and Bluzelle
Very good diversification
The 3 months correlation between GRIN and Bluzelle is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GRIN and Bluzelle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluzelle and GRIN 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 GRIN are associated (or correlated) with Bluzelle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluzelle has no effect on the direction of GRIN i.e., GRIN and Bluzelle go up and down completely randomly.
Pair Corralation between GRIN and Bluzelle
Assuming the 90 days trading horizon GRIN is expected to under-perform the Bluzelle. But the crypto coin apears to be less risky and, when comparing its historical volatility, GRIN is 1.38 times less risky than Bluzelle. The crypto coin trades about -0.21 of its potential returns per unit of risk. The Bluzelle is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Bluzelle on February 7, 2024 and sell it today you would lose (4.00) from holding Bluzelle or give up 9.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GRIN vs. Bluzelle
Performance |
Timeline |
GRIN |
Bluzelle |
GRIN and Bluzelle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GRIN and Bluzelle
The main advantage of trading using opposite GRIN and Bluzelle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIN position performs unexpectedly, Bluzelle 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 Bluzelle will offset losses from the drop in Bluzelle's long position.The idea behind GRIN and Bluzelle 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |