Correlation Between Belo Sun and Bluestone Resources

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

By analyzing existing cross correlation between Belo Sun Mining and Bluestone Resources, you can compare the effects of market volatilities on Belo Sun and Bluestone Resources 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 Belo Sun with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belo Sun and Bluestone Resources.

Diversification Opportunities for Belo Sun and Bluestone Resources

-0.28

Correlation Coefficient

Belo Sun  Bluestone Resources

Very good diversification

The 3 months correlation between Belo and Bluestone is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Belo Sun Mining and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Belo Sun 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 Belo Sun Mining are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Belo Sun i.e., Belo Sun and Bluestone Resources go up and down completely randomly.

Pair Corralation between Belo Sun and Bluestone Resources

If you would invest  46.00  in Bluestone Resources on March 7, 2024 and sell it today you would earn a total of  2.00  from holding Bluestone Resources or generate 4.35% return on investment over 90 days.

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

Belo Sun Mining  vs.  Bluestone Resources

Belo Sun Mining

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belo Sun Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Belo Sun displayed solid returns over the last few months and may actually be approaching a breakup point.

Bluestone Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bluestone Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Bluestone Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Belo Sun and Bluestone Resources

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

The idea behind Belo Sun Mining and Bluestone Resources 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.