Correlation Between BOS Better and Baird Medical

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

Diversification Opportunities for BOS Better and Baird Medical

0.0

Correlation Coefficient

BOS Better  Baird Medical

Pay attention - limited upside

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

Pair Corralation between BOS Better and Baird Medical

Given the investment horizon of 90 days BOS Better is expected to generate 32.0 times less return on investment than Baird Medical. But when comparing it to its historical volatility, BOS Better Online is 25.43 times less risky than Baird Medical. It trades about 0.17 of its potential returns per unit of risk. Baird Medical Investment is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Baird Medical Investment on October 26, 2024 and sell it today you would earn a total of  6.62  from holding Baird Medical Investment or generate 165.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

BOS Better Online  vs.  Baird Medical Investment

BOS Better Online

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

Baird Medical Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baird Medical Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Baird Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BOS Better and Baird Medical

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

The idea behind BOS Better Online and Baird Medical Investment 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 Anywhere module to track or share privately all of your investments from the convenience of any device.