Correlation Between Boise Cascade and STELLA JONES
Can any of the company-specific risk be diversified away by investing in both Boise Cascade and STELLA JONES 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 Boise Cascade and STELLA JONES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boise Cascade and STELLA JONES INC, you can compare the effects of market volatilities on Boise Cascade and STELLA JONES 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 Boise Cascade with a short position of STELLA JONES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boise Cascade and STELLA JONES.
Diversification Opportunities for Boise Cascade and STELLA JONES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boise and STELLA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Boise Cascade and STELLA JONES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STELLA JONES INC and Boise Cascade 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 Boise Cascade are associated (or correlated) with STELLA JONES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STELLA JONES INC has no effect on the direction of Boise Cascade i.e., Boise Cascade and STELLA JONES go up and down completely randomly.
Pair Corralation between Boise Cascade and STELLA JONES
Assuming the 90 days horizon Boise Cascade is expected to generate 0.86 times more return on investment than STELLA JONES. However, Boise Cascade is 1.16 times less risky than STELLA JONES. It trades about -0.04 of its potential returns per unit of risk. STELLA JONES INC is currently generating about -0.11 per unit of risk. If you would invest 12,631 in Boise Cascade on September 24, 2024 and sell it today you would lose (876.00) from holding Boise Cascade or give up 6.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Boise Cascade vs. STELLA JONES INC
Performance |
Timeline |
Boise Cascade |
STELLA JONES INC |
Boise Cascade and STELLA JONES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boise Cascade and STELLA JONES
The main advantage of trading using opposite Boise Cascade and STELLA JONES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boise Cascade position performs unexpectedly, STELLA JONES 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 STELLA JONES will offset losses from the drop in STELLA JONES's long position.Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. SVENSKA CELLULO B | Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. West Fraser Timber |
STELLA JONES vs. Svenska Cellulosa Aktiebolaget | STELLA JONES vs. SVENSKA CELLULO B | STELLA JONES vs. Svenska Cellulosa Aktiebolaget | STELLA JONES vs. West Fraser Timber |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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