Correlation Between Moulinvest and Boa Concept

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

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

Diversification Opportunities for Moulinvest and Boa Concept

0.12

Correlation Coefficient

Moulinvest  Boa Concept

Average diversification

The 3 months correlation between Moulinvest and Boa is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Moulinvest and Boa Concept SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boa Concept SA and Moulinvest 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 Moulinvest are associated (or correlated) with Boa Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boa Concept SA has no effect on the direction of Moulinvest i.e., Moulinvest and Boa Concept go up and down completely randomly.

Pair Corralation between Moulinvest and Boa Concept

Assuming the 90 days trading horizon Moulinvest is expected to under-perform the Boa Concept. In addition to that, Moulinvest is 5.77 times more volatile than Boa Concept SA. It trades about -0.06 of its total potential returns per unit of risk. Boa Concept SA is currently generating about 0.15 per unit of volatility. If you would invest  1,675  in Boa Concept SA on September 16, 2024 and sell it today you would earn a total of  25.00  from holding Boa Concept SA or generate 1.49% return on investment over 90 days.

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

Moulinvest  vs.  Boa Concept SA

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Moulinvest is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Boa Concept SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boa Concept SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Boa Concept is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Moulinvest and Boa Concept

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

The idea behind Moulinvest and Boa Concept SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.