Correlation Between Boat Rocker and Energy Fuels

Can any of the company-specific risk be diversified away by investing in both Boat Rocker and Energy Fuels 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 Boat Rocker and Energy Fuels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boat Rocker Media and Energy Fuels, you can compare the effects of market volatilities on Boat Rocker and Energy Fuels 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 Boat Rocker with a short position of Energy Fuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boat Rocker and Energy Fuels.

Diversification Opportunities for Boat Rocker and Energy Fuels

-0.18

Correlation Coefficient

Boat Rocker  Energy Fuels

Good diversification

The 3 months correlation between Boat and Energy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Boat Rocker Media and Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fuels and Boat Rocker 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 Boat Rocker Media are associated (or correlated) with Energy Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fuels has no effect on the direction of Boat Rocker i.e., Boat Rocker and Energy Fuels go up and down completely randomly.

Pair Corralation between Boat Rocker and Energy Fuels

Assuming the 90 days trading horizon Boat Rocker Media is expected to under-perform the Energy Fuels. In addition to that, Boat Rocker is 1.72 times more volatile than Energy Fuels. It trades about -0.14 of its total potential returns per unit of risk. Energy Fuels is currently generating about 0.02 per unit of volatility. If you would invest  824.00  in Energy Fuels on October 7, 2024 and sell it today you would earn a total of  4.00  from holding Energy Fuels or generate 0.49% return on investment over 90 days.

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

Boat Rocker Media  vs.  Energy Fuels

Boat Rocker Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boat Rocker Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Energy Fuels

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Fuels are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Energy Fuels displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boat Rocker and Energy Fuels

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

The idea behind Boat Rocker Media and Energy Fuels 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.