Correlation Between Badger Infrastructure and Boyd Group

Can any of the company-specific risk be diversified away by investing in both Badger Infrastructure and Boyd Group 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 Badger Infrastructure and Boyd Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Badger Infrastructure Solutions and Boyd Group Services, you can compare the effects of market volatilities on Badger Infrastructure and Boyd Group 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 Badger Infrastructure with a short position of Boyd Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Infrastructure and Boyd Group.

Diversification Opportunities for Badger Infrastructure and Boyd Group

0.06

Correlation Coefficient

Badger Infrastructure  Boyd Group

Significant diversification

The 3 months correlation between Badger and Boyd is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Badger Infrastructure Solution and Boyd Group Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Group Services and Badger Infrastructure 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 Badger Infrastructure Solutions are associated (or correlated) with Boyd Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Group Services has no effect on the direction of Badger Infrastructure i.e., Badger Infrastructure and Boyd Group go up and down completely randomly.

Pair Corralation between Badger Infrastructure and Boyd Group

Assuming the 90 days trading horizon Badger Infrastructure Solutions is expected to under-perform the Boyd Group. In addition to that, Badger Infrastructure is 1.7 times more volatile than Boyd Group Services. It trades about -0.02 of its total potential returns per unit of risk. Boyd Group Services is currently generating about 0.07 per unit of volatility. If you would invest  20,583  in Boyd Group Services on October 1, 2024 and sell it today you would earn a total of  1,038  from holding Boyd Group Services or generate 5.04% return on investment over 90 days.

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

Badger Infrastructure Solution  vs.  Boyd Group Services

Badger Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Badger Infrastructure Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Badger Infrastructure is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Boyd Group Services

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Group Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Boyd Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Badger Infrastructure and Boyd Group

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

The idea behind Badger Infrastructure Solutions and Boyd Group Services 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 Commodity Directory module to find actively traded commodities issued by global exchanges.