Correlation Between CDN Maverick and Boliden AB

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

By analyzing existing cross correlation between CDN Maverick Capital and Boliden AB ADR, you can compare the effects of market volatilities on CDN Maverick and Boliden AB 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 CDN Maverick with a short position of Boliden AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Boliden AB.

Diversification Opportunities for CDN Maverick and Boliden AB

-0.06

Correlation Coefficient

CDN Maverick  Boliden AB

Good diversification

The 3 months correlation between CDN and Boliden is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Boliden AB ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boliden AB ADR and CDN Maverick 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 CDN Maverick Capital are associated (or correlated) with Boliden AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boliden AB ADR has no effect on the direction of CDN Maverick i.e., CDN Maverick and Boliden AB go up and down completely randomly.

Pair Corralation between CDN Maverick and Boliden AB

Assuming the 90 days horizon CDN Maverick is expected to generate 2.41 times less return on investment than Boliden AB. In addition to that, CDN Maverick is 3.41 times more volatile than Boliden AB ADR. It trades about 0.01 of its total potential returns per unit of risk. Boliden AB ADR is currently generating about 0.07 per unit of volatility. If you would invest  5,619  in Boliden AB ADR on September 12, 2024 and sell it today you would earn a total of  547.00  from holding Boliden AB ADR or generate 9.73% return on investment over 90 days.

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

CDN Maverick Capital  vs.  Boliden AB ADR

CDN Maverick Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDN Maverick Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CDN Maverick is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Boliden AB ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boliden AB ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Boliden AB may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CDN Maverick and Boliden AB

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

The idea behind CDN Maverick Capital and Boliden AB ADR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.