Correlation Between BOC Aviation and FlexShopper

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

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

Diversification Opportunities for BOC Aviation and FlexShopper

-0.1

Correlation Coefficient

BOC Aviation  FlexShopper

Good diversification

The 3 months correlation between BOC and FlexShopper is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BOC Aviation Limited and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper and BOC Aviation 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 BOC Aviation Limited are associated (or correlated) with FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of BOC Aviation i.e., BOC Aviation and FlexShopper go up and down completely randomly.

Pair Corralation between BOC Aviation and FlexShopper

Assuming the 90 days horizon BOC Aviation Limited is expected to generate 0.27 times more return on investment than FlexShopper. However, BOC Aviation Limited is 3.72 times less risky than FlexShopper. It trades about -0.03 of its potential returns per unit of risk. FlexShopper is currently generating about -0.06 per unit of risk. If you would invest  786.00  in BOC Aviation Limited on December 1, 2024 and sell it today you would lose (26.00) from holding BOC Aviation Limited or give up 3.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

BOC Aviation Limited  vs.  FlexShopper

BOC Aviation Limited

Risk-Adjusted Performance

Very Weak

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

FlexShopper

Risk-Adjusted Performance

Very Weak

Over the last 90 days FlexShopper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly 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.

Pair Trading with BOC Aviation and FlexShopper

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

The idea behind BOC Aviation Limited and FlexShopper 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.