Correlation Between Boomer Holdings and Ceconomy

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

By analyzing existing cross correlation between Boomer Holdings and Ceconomy AG ADR, you can compare the effects of market volatilities on Boomer Holdings and Ceconomy 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 Boomer Holdings with a short position of Ceconomy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boomer Holdings and Ceconomy.

Diversification Opportunities for Boomer Holdings and Ceconomy

0.11

Correlation Coefficient

Boomer Holdings  Ceconomy

Average diversification

The 3 months correlation between Boomer and Ceconomy is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Boomer Holdings and Ceconomy AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceconomy AG ADR and Boomer Holdings 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 Boomer Holdings are associated (or correlated) with Ceconomy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceconomy AG ADR has no effect on the direction of Boomer Holdings i.e., Boomer Holdings and Ceconomy go up and down completely randomly.

Pair Corralation between Boomer Holdings and Ceconomy

If you would invest  53.00  in Ceconomy AG ADR on August 30, 2024 and sell it today you would earn a total of  6.00  from holding Ceconomy AG ADR or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Boomer Holdings  vs.  Ceconomy AG ADR

Boomer Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boomer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Boomer Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Ceconomy AG ADR

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ceconomy AG ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Ceconomy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boomer Holdings and Ceconomy

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

The idea behind Boomer Holdings and Ceconomy AG ADR 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.