Correlation Between Boat Rocker and US Financial
Can any of the company-specific risk be diversified away by investing in both Boat Rocker and US Financial 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 US Financial 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 US Financial 15, you can compare the effects of market volatilities on Boat Rocker and US Financial 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 US Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boat Rocker and US Financial.
Diversification Opportunities for Boat Rocker and US Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boat and FTU-PB is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Boat Rocker Media and US Financial 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Financial 15 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 US Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Financial 15 has no effect on the direction of Boat Rocker i.e., Boat Rocker and US Financial go up and down completely randomly.
Pair Corralation between Boat Rocker and US Financial
Assuming the 90 days trading horizon Boat Rocker Media is expected to under-perform the US Financial. In addition to that, Boat Rocker is 2.36 times more volatile than US Financial 15. It trades about -0.06 of its total potential returns per unit of risk. US Financial 15 is currently generating about 0.04 per unit of volatility. If you would invest 568.00 in US Financial 15 on October 5, 2024 and sell it today you would earn a total of 165.00 from holding US Financial 15 or generate 29.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Boat Rocker Media vs. US Financial 15
Performance |
Timeline |
Boat Rocker Media |
US Financial 15 |
Boat Rocker and US Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boat Rocker and US Financial
The main advantage of trading using opposite Boat Rocker and US Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boat Rocker position performs unexpectedly, US Financial 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 US Financial will offset losses from the drop in US Financial's long position.Boat Rocker vs. Apple Inc CDR | Boat Rocker vs. Berkshire Hathaway CDR | Boat Rocker vs. Microsoft Corp CDR | Boat Rocker vs. Alphabet Inc CDR |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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