Correlation Between Bowmo and CurrentC Power

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

By analyzing existing cross correlation between Bowmo Inc and CurrentC Power, you can compare the effects of market volatilities on Bowmo and CurrentC Power 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 Bowmo with a short position of CurrentC Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowmo and CurrentC Power.

Diversification Opportunities for Bowmo and CurrentC Power

0.23

Correlation Coefficient

Bowmo  CurrentC Power

Modest diversification

The 3 months correlation between Bowmo and CurrentC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bowmo Inc and CurrentC Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurrentC Power and Bowmo 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 Bowmo Inc are associated (or correlated) with CurrentC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurrentC Power has no effect on the direction of Bowmo i.e., Bowmo and CurrentC Power go up and down completely randomly.

Pair Corralation between Bowmo and CurrentC Power

Given the investment horizon of 90 days Bowmo Inc is expected to generate 2.1 times more return on investment than CurrentC Power. However, Bowmo is 2.1 times more volatile than CurrentC Power. It trades about 0.22 of its potential returns per unit of risk. CurrentC Power is currently generating about 0.11 per unit of risk. If you would invest  0.03  in Bowmo Inc on September 4, 2024 and sell it today you would earn a total of  0.20  from holding Bowmo Inc or generate 666.67% return on investment over 90 days.

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

Bowmo Inc  vs.  CurrentC Power

Bowmo Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bowmo Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Bowmo displayed solid returns over the last few months and may actually be approaching a breakup point.

CurrentC Power

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bowmo and CurrentC Power

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

The idea behind Bowmo Inc and CurrentC Power 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.