Correlation Between BOS Better and MARTIN

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

Diversification Opportunities for BOS Better and MARTIN

-0.22

Correlation Coefficient

BOS Better  MARTIN

Very good diversification

The 3 months correlation between BOS and MARTIN is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and MARTIN MARIETTA MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARTIN MARIETTA MATERIALS 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 MARTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARTIN MARIETTA MATERIALS has no effect on the direction of BOS Better i.e., BOS Better and MARTIN go up and down completely randomly.

Pair Corralation between BOS Better and MARTIN

Given the investment horizon of 90 days BOS Better Online is expected to generate 1.78 times more return on investment than MARTIN. However, BOS Better is 1.78 times more volatile than MARTIN MARIETTA MATERIALS. It trades about 0.18 of its potential returns per unit of risk. MARTIN MARIETTA MATERIALS is currently generating about -0.18 per unit of risk. If you would invest  296.00  in BOS Better Online on September 26, 2024 and sell it today you would earn a total of  32.00  from holding BOS Better Online or generate 10.81% return on investment over 90 days.

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

BOS Better Online  vs.  MARTIN MARIETTA MATERIALS

BOS Better Online

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MARTIN MARIETTA MATERIALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARTIN MARIETTA MATERIALS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MARTIN MARIETTA MATERIALS investors.

Pair Trading with BOS Better and MARTIN

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

The idea behind BOS Better Online and MARTIN MARIETTA MATERIALS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.