Correlation Between Boqii Holding and Arko Corp

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

By analyzing existing cross correlation between Boqii Holding Limited and Arko Corp, you can compare the effects of market volatilities on Boqii Holding and Arko Corp 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 Boqii Holding with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and Arko Corp.

Diversification Opportunities for Boqii Holding and Arko Corp

-0.2

Correlation Coefficient

Boqii Holding  Arko Corp

Good diversification

The 3 months correlation between Boqii and Arko is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Boqii Holding 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 Boqii Holding Limited are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Boqii Holding i.e., Boqii Holding and Arko Corp go up and down completely randomly.

Pair Corralation between Boqii Holding and Arko Corp

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to under-perform the Arko Corp. In addition to that, Boqii Holding is 2.03 times more volatile than Arko Corp. It trades about -0.15 of its total potential returns per unit of risk. Arko Corp is currently generating about -0.06 per unit of volatility. If you would invest  703.00  in Arko Corp on September 26, 2024 and sell it today you would lose (46.00) from holding Arko Corp or give up 6.54% of portfolio value over 90 days.

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

Boqii Holding Limited  vs.  Arko Corp

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Arko Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boqii Holding and Arko Corp

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

The idea behind Boqii Holding Limited and Arko Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.