Correlation Between Bohai Leasing and BOE Technology

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

By analyzing existing cross correlation between Bohai Leasing Co and BOE Technology Group, you can compare the effects of market volatilities on Bohai Leasing and BOE Technology 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 Bohai Leasing with a short position of BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohai Leasing and BOE Technology.

Diversification Opportunities for Bohai Leasing and BOE Technology

-0.18

Correlation Coefficient

Bohai Leasing  BOE Technology

Good diversification

The 3 months correlation between Bohai and BOE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bohai Leasing Co and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group and Bohai Leasing 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 Bohai Leasing Co are associated (or correlated) with BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Bohai Leasing i.e., Bohai Leasing and BOE Technology go up and down completely randomly.

Pair Corralation between Bohai Leasing and BOE Technology

Assuming the 90 days trading horizon Bohai Leasing Co is expected to under-perform the BOE Technology. In addition to that, Bohai Leasing is 1.15 times more volatile than BOE Technology Group. It trades about -0.14 of its total potential returns per unit of risk. BOE Technology Group is currently generating about -0.03 per unit of volatility. If you would invest  440.00  in BOE Technology Group on December 24, 2024 and sell it today you would lose (15.00) from holding BOE Technology Group or give up 3.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bohai Leasing Co  vs.  BOE Technology Group

Bohai Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bohai Leasing Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BOE Technology Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOE Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BOE Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bohai Leasing and BOE Technology

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

The idea behind Bohai Leasing Co and BOE Technology Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..