Correlation Between Boswell J and Pardee Resources

Can any of the company-specific risk be diversified away by investing in both Boswell J and Pardee Resources 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 Pardee Resources 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 Pardee Resources Co, you can compare the effects of market volatilities on Boswell J and Pardee Resources 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 Pardee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boswell J and Pardee Resources.

Diversification Opportunities for Boswell J and Pardee Resources

0.21

Correlation Coefficient

Boswell J  Pardee Resources

Modest diversification

The 3 months correlation between Boswell and Pardee is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Boswell J G and Pardee Resources Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardee Resources 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 Pardee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardee Resources has no effect on the direction of Boswell J i.e., Boswell J and Pardee Resources go up and down completely randomly.

Pair Corralation between Boswell J and Pardee Resources

Given the investment horizon of 90 days Boswell J is expected to generate 2.27 times less return on investment than Pardee Resources. In addition to that, Boswell J is 1.38 times more volatile than Pardee Resources Co. It trades about 0.04 of its total potential returns per unit of risk. Pardee Resources Co is currently generating about 0.11 per unit of volatility. If you would invest  30,800  in Pardee Resources Co on September 13, 2024 and sell it today you would earn a total of  2,300  from holding Pardee Resources Co or generate 7.47% 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.  Pardee Resources Co

Boswell J G

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boswell J G are ranked lower than 2 (%) 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.

Pardee Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pardee Resources Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Pardee Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Boswell J and Pardee Resources

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

The idea behind Boswell J G and Pardee Resources Co 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.