Correlation Between Better Choice and Boosh Plant-Based

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

By analyzing existing cross correlation between Better Choice and Boosh Plant Based Brands, you can compare the effects of market volatilities on Better Choice and Boosh Plant-Based 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 Better Choice with a short position of Boosh Plant-Based. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better Choice and Boosh Plant-Based.

Diversification Opportunities for Better Choice and Boosh Plant-Based

0.42

Correlation Coefficient

Better Choice  Boosh Plant-Based

Very weak diversification

The 3 months correlation between Better and Boosh is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Better Choice and Boosh Plant Based Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boosh Plant Based and Better Choice 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 Better Choice are associated (or correlated) with Boosh Plant-Based. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boosh Plant Based has no effect on the direction of Better Choice i.e., Better Choice and Boosh Plant-Based go up and down completely randomly.

Pair Corralation between Better Choice and Boosh Plant-Based

Given the investment horizon of 90 days Better Choice is expected to under-perform the Boosh Plant-Based. But the stock apears to be less risky and, when comparing its historical volatility, Better Choice is 5.09 times less risky than Boosh Plant-Based. The stock trades about -0.02 of its potential returns per unit of risk. The Boosh Plant Based Brands is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.30  in Boosh Plant Based Brands on September 3, 2024 and sell it today you would lose (0.12) from holding Boosh Plant Based Brands or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Better Choice  vs.  Boosh Plant Based Brands

Better Choice

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Better Choice 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.

Boosh Plant Based

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boosh Plant Based Brands are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting forward indicators, Boosh Plant-Based reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Better Choice and Boosh Plant-Based

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

The idea behind Better Choice and Boosh Plant Based Brands 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.