Correlation Between Boxer Retail and Kore Potash

Can any of the company-specific risk be diversified away by investing in both Boxer Retail and Kore Potash 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 Kore Potash into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boxer Retail and Kore Potash Plc, you can compare the effects of market volatilities on Boxer Retail and Kore Potash 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 Kore Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxer Retail and Kore Potash.

Diversification Opportunities for Boxer Retail and Kore Potash

-0.13

Correlation Coefficient

Boxer Retail  Kore Potash

Good diversification

The 3 months correlation between Boxer and Kore is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Boxer Retail and Kore Potash Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kore Potash Plc 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 Kore Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kore Potash Plc has no effect on the direction of Boxer Retail i.e., Boxer Retail and Kore Potash go up and down completely randomly.

Pair Corralation between Boxer Retail and Kore Potash

Assuming the 90 days trading horizon Boxer Retail is expected to generate 0.38 times more return on investment than Kore Potash. However, Boxer Retail is 2.63 times less risky than Kore Potash. It trades about 0.12 of its potential returns per unit of risk. Kore Potash Plc is currently generating about -0.02 per unit of risk. If you would invest  639,700  in Boxer Retail on December 28, 2024 and sell it today you would earn a total of  82,800  from holding Boxer Retail or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Boxer Retail  vs.  Kore Potash Plc

Boxer Retail

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boxer Retail are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Boxer Retail exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kore Potash Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kore Potash Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Boxer Retail and Kore Potash

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

The idea behind Boxer Retail and Kore Potash Plc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.