Correlation Between AirIQ and Bowmo

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

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

Diversification Opportunities for AirIQ and Bowmo

0.38

Correlation Coefficient

AirIQ  Bowmo

Weak diversification

The 3 months correlation between AirIQ and Bowmo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AirIQ Inc and Bowmo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowmo Inc and AirIQ 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 AirIQ Inc are associated (or correlated) with Bowmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowmo Inc has no effect on the direction of AirIQ i.e., AirIQ and Bowmo go up and down completely randomly.

Pair Corralation between AirIQ and Bowmo

Assuming the 90 days horizon AirIQ Inc is expected to generate 0.2 times more return on investment than Bowmo. However, AirIQ Inc is 5.06 times less risky than Bowmo. It trades about -0.05 of its potential returns per unit of risk. Bowmo Inc is currently generating about -0.02 per unit of risk. If you would invest  28.00  in AirIQ Inc on December 4, 2024 and sell it today you would lose (6.00) from holding AirIQ Inc or give up 21.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

AirIQ Inc  vs.  Bowmo Inc

AirIQ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AirIQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bowmo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowmo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AirIQ and Bowmo

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

The idea behind AirIQ Inc and Bowmo Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.