Correlation Between Boss Energy and Black Cat

Can any of the company-specific risk be diversified away by investing in both Boss Energy and Black Cat 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 Boss Energy and Black Cat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boss Energy Limited and Black Cat Syndicate, you can compare the effects of market volatilities on Boss Energy and Black Cat 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 Boss Energy with a short position of Black Cat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boss Energy and Black Cat.

Diversification Opportunities for Boss Energy and Black Cat

-0.44

Correlation Coefficient

Boss Energy  Black Cat

Very good diversification

The 3 months correlation between Boss and Black is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Boss Energy Limited and Black Cat Syndicate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Cat Syndicate and Boss Energy 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 Boss Energy Limited are associated (or correlated) with Black Cat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Cat Syndicate has no effect on the direction of Boss Energy i.e., Boss Energy and Black Cat go up and down completely randomly.

Pair Corralation between Boss Energy and Black Cat

Assuming the 90 days trading horizon Boss Energy Limited is expected to generate 0.68 times more return on investment than Black Cat. However, Boss Energy Limited is 1.47 times less risky than Black Cat. It trades about -0.35 of its potential returns per unit of risk. Black Cat Syndicate is currently generating about -0.27 per unit of risk. If you would invest  284.00  in Boss Energy Limited on September 28, 2024 and sell it today you would lose (48.00) from holding Boss Energy Limited or give up 16.9% of portfolio value over 90 days.

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

Boss Energy Limited  vs.  Black Cat Syndicate

Boss Energy Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boss Energy Limited 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Black Cat Syndicate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Black Cat Syndicate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Black Cat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boss Energy and Black Cat

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

The idea behind Boss Energy Limited and Black Cat Syndicate 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 Stocks Directory module to find actively traded stocks across global markets.