Correlation Between BOS BETTER and CCL Industries

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

By analyzing existing cross correlation between BOS BETTER ONLINE and CCL Industries, you can compare the effects of market volatilities on BOS BETTER and CCL Industries 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 BOS BETTER with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS BETTER and CCL Industries.

Diversification Opportunities for BOS BETTER and CCL Industries

0.0

Correlation Coefficient

BOS BETTER  CCL Industries

Pay attention - limited upside

The 3 months correlation between BOS and CCL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BOS BETTER ONLINE and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and BOS BETTER 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 BOS BETTER ONLINE are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of BOS BETTER i.e., BOS BETTER and CCL Industries go up and down completely randomly.

Pair Corralation between BOS BETTER and CCL Industries

If you would invest  236.00  in BOS BETTER ONLINE on October 6, 2024 and sell it today you would earn a total of  0.00  from holding BOS BETTER ONLINE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

BOS BETTER ONLINE  vs.  CCL Industries

BOS BETTER ONLINE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BOS BETTER ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BOS BETTER is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CCL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CCL Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BOS BETTER and CCL Industries

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

The idea behind BOS BETTER ONLINE and CCL Industries 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.