Correlation Between Boxer Retail and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both Boxer Retail and Bytes Technology 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 Boxer Retail and Bytes Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boxer Retail and Bytes Technology, you can compare the effects of market volatilities on Boxer Retail and Bytes Technology 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 Boxer Retail with a short position of Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxer Retail and Bytes Technology.
Diversification Opportunities for Boxer Retail and Bytes Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boxer and Bytes is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Boxer Retail and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology and Boxer Retail 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 Boxer Retail are associated (or correlated) with Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of Boxer Retail i.e., Boxer Retail and Bytes Technology go up and down completely randomly.
Pair Corralation between Boxer Retail and Bytes Technology
Assuming the 90 days trading horizon Boxer Retail is expected to generate 1.32 times less return on investment than Bytes Technology. But when comparing it to its historical volatility, Boxer Retail is 1.56 times less risky than Bytes Technology. It trades about 0.13 of its potential returns per unit of risk. Bytes Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 999,100 in Bytes Technology on December 27, 2024 and sell it today you would earn a total of 171,800 from holding Bytes Technology or generate 17.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Boxer Retail vs. Bytes Technology
Performance |
Timeline |
Boxer Retail |
Bytes Technology |
Boxer Retail and Bytes Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boxer Retail and Bytes Technology
The main advantage of trading using opposite Boxer Retail and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boxer Retail position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.Boxer Retail vs. Harmony Gold Mining | Boxer Retail vs. Astral Foods | Boxer Retail vs. Lesaka Technologies | Boxer Retail vs. Advtech |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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