Correlation Between Boyd Group and Conquest Resources

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

By analyzing existing cross correlation between Boyd Group Services and Conquest Resources, you can compare the effects of market volatilities on Boyd Group and Conquest 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 Boyd Group with a short position of Conquest Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Group and Conquest Resources.

Diversification Opportunities for Boyd Group and Conquest Resources

-0.39

Correlation Coefficient

Boyd Group  Conquest Resources

Very good diversification

The 3 months correlation between Boyd and Conquest is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Group Services and Conquest Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquest Resources and Boyd Group 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 Boyd Group Services are associated (or correlated) with Conquest Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquest Resources has no effect on the direction of Boyd Group i.e., Boyd Group and Conquest Resources go up and down completely randomly.

Pair Corralation between Boyd Group and Conquest Resources

If you would invest  3.00  in Conquest Resources on September 12, 2024 and sell it today you would lose (1.00) from holding Conquest Resources or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Boyd Group Services  vs.  Conquest Resources

Boyd Group Services

Risk-Adjusted Performance

0 of 100

Very Weak

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

Conquest Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conquest Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Conquest Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Boyd Group and Conquest Resources

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

The idea behind Boyd Group Services and Conquest Resources 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.