Correlation Between Boom Logistics and Super Retail
Can any of the company-specific risk be diversified away by investing in both Boom Logistics and Super Retail 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 Boom Logistics and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boom Logistics and Super Retail Group, you can compare the effects of market volatilities on Boom Logistics and Super Retail 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 Boom Logistics with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boom Logistics and Super Retail.
Diversification Opportunities for Boom Logistics and Super Retail
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boom and Super is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Boom Logistics and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Boom Logistics 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 Boom Logistics are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Boom Logistics i.e., Boom Logistics and Super Retail go up and down completely randomly.
Pair Corralation between Boom Logistics and Super Retail
Assuming the 90 days trading horizon Boom Logistics is expected to generate 0.86 times more return on investment than Super Retail. However, Boom Logistics is 1.16 times less risky than Super Retail. It trades about 0.0 of its potential returns per unit of risk. Super Retail Group is currently generating about -0.12 per unit of risk. If you would invest 140.00 in Boom Logistics on September 25, 2024 and sell it today you would lose (1.00) from holding Boom Logistics or give up 0.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Boom Logistics vs. Super Retail Group
Performance |
Timeline |
Boom Logistics |
Super Retail Group |
Boom Logistics and Super Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boom Logistics and Super Retail
The main advantage of trading using opposite Boom Logistics and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boom Logistics position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.Boom Logistics vs. Charter Hall Education | Boom Logistics vs. The Environmental Group | Boom Logistics vs. Galena Mining | Boom Logistics vs. Mount Gibson Iron |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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