Correlation Between Bondbloxx ETF and Woodlands Financial

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

By analyzing existing cross correlation between Bondbloxx ETF Trust and Woodlands Financial Services, you can compare the effects of market volatilities on Bondbloxx ETF and Woodlands Financial 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 Bondbloxx ETF with a short position of Woodlands Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Woodlands Financial.

Diversification Opportunities for Bondbloxx ETF and Woodlands Financial

-0.4

Correlation Coefficient

Bondbloxx ETF  Woodlands Financial

Very good diversification

The 3 months correlation between Bondbloxx and Woodlands is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Woodlands Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodlands Financial and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Woodlands Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodlands Financial has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Woodlands Financial go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Woodlands Financial

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 4.88 times less return on investment than Woodlands Financial. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 30.02 times less risky than Woodlands Financial. It trades about 0.1 of its potential returns per unit of risk. Woodlands Financial Services is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,417  in Woodlands Financial Services on September 14, 2024 and sell it today you would lose (297.00) from holding Woodlands Financial Services or give up 12.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.35%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Woodlands Financial Services

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Woodlands Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Woodlands Financial Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Woodlands Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bondbloxx ETF and Woodlands Financial

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

The idea behind Bondbloxx ETF Trust and Woodlands Financial Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.