Correlation Between Boqii Holding and Bright Scholar

Can any of the company-specific risk be diversified away by investing in both Boqii Holding and Bright Scholar 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 Boqii Holding and Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boqii Holding Limited and Bright Scholar Education, you can compare the effects of market volatilities on Boqii Holding and Bright Scholar 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 Boqii Holding with a short position of Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and Bright Scholar.

Diversification Opportunities for Boqii Holding and Bright Scholar

0.45

Correlation Coefficient

Boqii Holding  Bright Scholar

Very weak diversification

The 3 months correlation between Boqii and Bright is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and Boqii Holding 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 Boqii Holding Limited are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Boqii Holding i.e., Boqii Holding and Bright Scholar go up and down completely randomly.

Pair Corralation between Boqii Holding and Bright Scholar

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 1.07 times more return on investment than Bright Scholar. However, Boqii Holding is 1.07 times more volatile than Bright Scholar Education. It trades about 0.05 of its potential returns per unit of risk. Bright Scholar Education is currently generating about -0.03 per unit of risk. If you would invest  37.00  in Boqii Holding Limited on October 5, 2024 and sell it today you would earn a total of  1.00  from holding Boqii Holding Limited or generate 2.7% return on investment over 90 days.

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

Boqii Holding Limited  vs.  Bright Scholar Education

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Bright Scholar Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bright Scholar Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Boqii Holding and Bright Scholar

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

The idea behind Boqii Holding Limited and Bright Scholar Education 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..