Correlation Between Boston Omaha and NioCorp Developments

Can any of the company-specific risk be diversified away by investing in both Boston Omaha and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on Boston Omaha and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Omaha and NioCorp Developments.

Diversification Opportunities for Boston Omaha and NioCorp Developments

0.58

Correlation Coefficient

Boston Omaha  NioCorp Developments

Very weak diversification

The 3 months correlation between Boston and NioCorp is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Boston Omaha i.e., Boston Omaha and NioCorp Developments go up and down completely randomly.

Pair Corralation between Boston Omaha and NioCorp Developments

Considering the 90-day investment horizon Boston Omaha is expected to generate 9.71 times less return on investment than NioCorp Developments. But when comparing it to its historical volatility, Boston Omaha Corp is 3.61 times less risky than NioCorp Developments. It trades about 0.05 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  141.00  in NioCorp Developments Ltd on December 27, 2024 and sell it today you would earn a total of  64.30  from holding NioCorp Developments Ltd or generate 45.6% return on investment over 90 days.

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

Boston Omaha Corp  vs.  NioCorp Developments Ltd

Boston Omaha Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Omaha Corp are ranked lower than 3 (%) 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.

NioCorp Developments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NioCorp Developments Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, NioCorp Developments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Omaha and NioCorp Developments

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

The idea behind Boston Omaha Corp and NioCorp Developments Ltd 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.