Correlation Between BOS Better and 970648AJ0

Can any of the company-specific risk be diversified away by investing in both BOS Better and 970648AJ0 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 BOS Better and 970648AJ0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOS Better Online and WTW 295 15 SEP 29, you can compare the effects of market volatilities on BOS Better and 970648AJ0 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 BOS Better with a short position of 970648AJ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and 970648AJ0.

Diversification Opportunities for BOS Better and 970648AJ0

-0.81

Correlation Coefficient

BOS Better  970648AJ0

Pay attention - limited upside

The 3 months correlation between BOS and 970648AJ0 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and WTW 295 15 SEP 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WTW 295 15 and BOS Better 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 BOS Better Online are associated (or correlated) with 970648AJ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WTW 295 15 has no effect on the direction of BOS Better i.e., BOS Better and 970648AJ0 go up and down completely randomly.

Pair Corralation between BOS Better and 970648AJ0

Given the investment horizon of 90 days BOS Better Online is expected to generate 2.44 times more return on investment than 970648AJ0. However, BOS Better is 2.44 times more volatile than WTW 295 15 SEP 29. It trades about 0.25 of its potential returns per unit of risk. WTW 295 15 SEP 29 is currently generating about -0.15 per unit of risk. If you would invest  276.00  in BOS Better Online on September 5, 2024 and sell it today you would earn a total of  69.00  from holding BOS Better Online or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

BOS Better Online  vs.  WTW 295 15 SEP 29

BOS Better Online

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

WTW 295 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WTW 295 15 SEP 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 970648AJ0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BOS Better and 970648AJ0

The main advantage of trading using opposite BOS Better and 970648AJ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, 970648AJ0 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 970648AJ0 will offset losses from the drop in 970648AJ0's long position.

The idea behind BOS Better Online and WTW 295 15 SEP 29 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.