Correlation Between Boston Omaha and Allient

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

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

Diversification Opportunities for Boston Omaha and Allient

0.28

Correlation Coefficient

Boston Omaha  Allient

Modest diversification

The 3 months correlation between Boston and Allient is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Boston Omaha 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 Boston Omaha Corp are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Boston Omaha i.e., Boston Omaha and Allient go up and down completely randomly.

Pair Corralation between Boston Omaha and Allient

Considering the 90-day investment horizon Boston Omaha is expected to generate 3.67 times less return on investment than Allient. But when comparing it to its historical volatility, Boston Omaha Corp is 1.89 times less risky than Allient. It trades about 0.07 of its potential returns per unit of risk. Allient is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,089  in Allient on September 17, 2024 and sell it today you would earn a total of  493.00  from holding Allient or generate 23.6% return on investment over 90 days.

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

Boston Omaha Corp  vs.  Allient

Boston Omaha Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Omaha Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Boston Omaha is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Allient

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Omaha and Allient

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

The idea behind Boston Omaha Corp and Allient 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.