Correlation Between Beowulf Mining and Adventure Box

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

By analyzing existing cross correlation between Beowulf Mining PLC and Adventure Box Technology, you can compare the effects of market volatilities on Beowulf Mining and Adventure Box 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 Beowulf Mining with a short position of Adventure Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and Adventure Box.

Diversification Opportunities for Beowulf Mining and Adventure Box

0.84

Correlation Coefficient

Beowulf Mining  Adventure Box

Very poor diversification

The 3 months correlation between Beowulf and Adventure is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining PLC and Adventure Box Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventure Box Technology and Beowulf Mining 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 Beowulf Mining PLC are associated (or correlated) with Adventure Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventure Box Technology has no effect on the direction of Beowulf Mining i.e., Beowulf Mining and Adventure Box go up and down completely randomly.

Pair Corralation between Beowulf Mining and Adventure Box

Assuming the 90 days trading horizon Beowulf Mining PLC is expected to under-perform the Adventure Box. But the stock apears to be less risky and, when comparing its historical volatility, Beowulf Mining PLC is 1.15 times less risky than Adventure Box. The stock trades about -0.08 of its potential returns per unit of risk. The Adventure Box Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  31.00  in Adventure Box Technology on October 10, 2024 and sell it today you would lose (12.00) from holding Adventure Box Technology or give up 38.71% of portfolio value over 90 days.

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

Beowulf Mining PLC  vs.  Adventure Box Technology

Beowulf Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beowulf Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Adventure Box Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventure Box Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Beowulf Mining and Adventure Box

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

The idea behind Beowulf Mining PLC and Adventure Box Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.