Correlation Between Bain Capital and Blucora

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Can any of the company-specific risk be diversified away by investing in both Bain Capital and Blucora 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 Bain Capital and Blucora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bain Capital Specialty and Blucora, you can compare the effects of market volatilities on Bain Capital and Blucora 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 Bain Capital with a short position of Blucora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bain Capital and Blucora.

Diversification Opportunities for Bain Capital and Blucora

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bain Capital and Blucora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bain Capital Specialty and Blucora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blucora and Bain Capital 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 Bain Capital Specialty are associated (or correlated) with Blucora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blucora has no effect on the direction of Bain Capital i.e., Bain Capital and Blucora go up and down completely randomly.

Pair Corralation between Bain Capital and Blucora

If you would invest  1,920  in Blucora on May 21, 2022 and sell it today you would earn a total of  354.00  from holding Blucora or generate 18.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.35%
ValuesDaily Returns

Bain Capital Specialty  vs.  Blucora

 Performance (%) 
       Timeline  
Bain Capital Specialty 
Bain Capital Performance
0 of 100
Over the last 90 days Bain Capital Specialty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bain Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Blucora 
Blucora Performance
19 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blucora are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Blucora reported solid returns over the last few months and may actually be approaching a breakup point.

Blucora Price Channel

Bain Capital and Blucora Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bain Capital and Blucora

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

Bain Capital Specialty

Pair trading matchups for Bain Capital

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Bain Capital as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Bain Capital's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Bain Capital's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Bain Capital Specialty.
The idea behind Bain Capital Specialty and Blucora 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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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