Correlation Between BOS Better and Lantronix

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

Diversification Opportunities for BOS Better and Lantronix

-0.41

Correlation Coefficient

BOS Better  Lantronix

Very good diversification

The 3 months correlation between BOS and Lantronix is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix 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 Lantronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantronix has no effect on the direction of BOS Better i.e., BOS Better and Lantronix go up and down completely randomly.

Pair Corralation between BOS Better and Lantronix

Given the investment horizon of 90 days BOS Better is expected to generate 2.28 times less return on investment than Lantronix. But when comparing it to its historical volatility, BOS Better Online is 1.17 times less risky than Lantronix. It trades about 0.17 of its potential returns per unit of risk. Lantronix is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  340.00  in Lantronix on October 8, 2024 and sell it today you would earn a total of  83.00  from holding Lantronix or generate 24.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BOS Better Online  vs.  Lantronix

BOS Better Online

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 16 (%) 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.

Lantronix

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Lantronix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BOS Better and Lantronix

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

The idea behind BOS Better Online and Lantronix 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.