Correlation Between Boston Omaha and Viking Holdings

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

Diversification Opportunities for Boston Omaha and Viking Holdings

0.06

Correlation Coefficient

Boston Omaha  Viking Holdings

Significant diversification

The 3 months correlation between Boston and Viking is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Holdings 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 Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Boston Omaha i.e., Boston Omaha and Viking Holdings go up and down completely randomly.

Pair Corralation between Boston Omaha and Viking Holdings

Considering the 90-day investment horizon Boston Omaha Corp is expected to under-perform the Viking Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Boston Omaha Corp is 1.2 times less risky than Viking Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Viking Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,610  in Viking Holdings on October 11, 2024 and sell it today you would earn a total of  1,695  from holding Viking Holdings or generate 64.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	35.35%
Values	Daily Returns

Boston Omaha Corp  vs.  Viking Holdings

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Viking Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viking Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Viking Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Omaha and Viking Holdings

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

The idea behind Boston Omaha Corp and Viking Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.