Correlation Between Third Point and Bigblu Broadband

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

By analyzing existing cross correlation between Third Point Investors and Bigblu Broadband PLC, you can compare the effects of market volatilities on Third Point and Bigblu Broadband 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 Third Point with a short position of Bigblu Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Point and Bigblu Broadband.

Diversification Opportunities for Third Point and Bigblu Broadband

-0.8

Correlation Coefficient

Third Point  Bigblu Broadband

Pay attention - limited upside

The 3 months correlation between Third and Bigblu is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Third Point Investors and Bigblu Broadband PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bigblu Broadband PLC and Third Point 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 Third Point Investors are associated (or correlated) with Bigblu Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bigblu Broadband PLC has no effect on the direction of Third Point i.e., Third Point and Bigblu Broadband go up and down completely randomly.

Pair Corralation between Third Point and Bigblu Broadband

Assuming the 90 days trading horizon Third Point Investors is expected to generate 0.29 times more return on investment than Bigblu Broadband. However, Third Point Investors is 3.5 times less risky than Bigblu Broadband. It trades about 0.05 of its potential returns per unit of risk. Bigblu Broadband PLC is currently generating about -0.02 per unit of risk. If you would invest  147,500  in Third Point Investors on April 15, 2025 and sell it today you would earn a total of  39,750  from holding Third Point Investors or generate 26.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.8%
Values	Daily Returns

Third Point Investors  vs.  Bigblu Broadband PLC

Third Point Investors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Third Point Investors are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Third Point is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bigblu Broadband PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bigblu Broadband PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Third Point and Bigblu Broadband

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

The idea behind Third Point Investors and Bigblu Broadband PLC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.