Correlation Between Boswell J and Mosaic

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

By analyzing existing cross correlation between Boswell J G and The Mosaic, you can compare the effects of market volatilities on Boswell J and Mosaic 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 Boswell J with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boswell J and Mosaic.

Diversification Opportunities for Boswell J and Mosaic

0.2

Correlation Coefficient

Boswell J  Mosaic

Modest diversification

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

Pair Corralation between Boswell J and Mosaic

Given the investment horizon of 90 days Boswell J is expected to generate 3.86 times less return on investment than Mosaic. But when comparing it to its historical volatility, Boswell J G is 1.57 times less risky than Mosaic. It trades about 0.02 of its potential returns per unit of risk. The Mosaic is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,523  in The Mosaic on September 16, 2024 and sell it today you would earn a total of  156.00  from holding The Mosaic or generate 6.18% return on investment over 90 days.

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

Boswell J G  vs.  The Mosaic

Boswell J G

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boswell J G are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Boswell J is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mosaic

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Boswell J and Mosaic

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

The idea behind Boswell J G and The Mosaic 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.