Correlation Between Boswell J and Itafos

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

By analyzing existing cross correlation between Boswell J G and Itafos Inc, you can compare the effects of market volatilities on Boswell J and Itafos 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 Boswell J with a short position of Itafos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boswell J and Itafos.

Diversification Opportunities for Boswell J and Itafos

0.06

Correlation Coefficient

Boswell J  Itafos

Significant diversification

The 3 months correlation between Boswell and Itafos is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Boswell J G and Itafos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos Inc and Boswell J 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 Boswell J G are associated (or correlated) with Itafos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Inc has no effect on the direction of Boswell J i.e., Boswell J and Itafos go up and down completely randomly.

Pair Corralation between Boswell J and Itafos

Given the investment horizon of 90 days Boswell J G is expected to under-perform the Itafos. But the pink sheet apears to be less risky and, when comparing its historical volatility, Boswell J G is 1.93 times less risky than Itafos. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Itafos Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  116.00  in Itafos Inc on October 23, 2024 and sell it today you would earn a total of  20.00  from holding Itafos Inc or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Boswell J G  vs.  Itafos Inc

Boswell J G

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boswell J G are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Boswell J is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Itafos Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Itafos Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Itafos may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Boswell J and Itafos

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

The idea behind Boswell J G and Itafos Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..