Correlation Between Bowmo and GainClients

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

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

Diversification Opportunities for Bowmo and GainClients

0.0

Correlation Coefficient

Bowmo  GainClients

Pay attention - limited upside

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

Pair Corralation between Bowmo and GainClients

Given the investment horizon of 90 days Bowmo Inc is expected to generate 0.62 times more return on investment than GainClients. However, Bowmo Inc is 1.6 times less risky than GainClients. It trades about 0.07 of its potential returns per unit of risk. GainClients is currently generating about 0.04 per unit of risk. If you would invest  15.00  in Bowmo Inc on September 24, 2024 and sell it today you would lose (14.90) from holding Bowmo Inc or give up 99.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Bowmo Inc  vs.  GainClients

Bowmo Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bowmo Inc are ranked lower than 14 (%) 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.

GainClients

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GainClients has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, GainClients is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bowmo and GainClients

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

The idea behind Bowmo Inc and GainClients 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 the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.