Correlation Between BOS Better and TOPTB

Can any of the company-specific risk be diversified away by investing in both BOS Better and TOPTB 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 TOPTB 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 TOPTB 5375 20 NOV 48, you can compare the effects of market volatilities on BOS Better and TOPTB 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 TOPTB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and TOPTB.

Diversification Opportunities for BOS Better and TOPTB

-0.16

Correlation Coefficient

BOS Better  TOPTB

Good diversification

The 3 months correlation between BOS and TOPTB is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and TOPTB 5375 20 NOV 48 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPTB 5375 20 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 TOPTB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPTB 5375 20 has no effect on the direction of BOS Better i.e., BOS Better and TOPTB go up and down completely randomly.

Pair Corralation between BOS Better and TOPTB

Given the investment horizon of 90 days BOS Better is expected to generate 3.03 times less return on investment than TOPTB. But when comparing it to its historical volatility, BOS Better Online is 1.08 times less risky than TOPTB. It trades about 0.2 of its potential returns per unit of risk. TOPTB 5375 20 NOV 48 is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  8,066  in TOPTB 5375 20 NOV 48 on October 20, 2024 and sell it today you would earn a total of  1,235  from holding TOPTB 5375 20 NOV 48 or generate 15.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.0%
Values	Daily Returns

BOS Better Online  vs.  TOPTB 5375 20 NOV 48

BOS Better Online

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 14 (%) 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.

TOPTB 5375 20

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TOPTB 5375 20 NOV 48 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, TOPTB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BOS Better and TOPTB

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

The idea behind BOS Better Online and TOPTB 5375 20 NOV 48 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.