Correlation Between Boardwalktech Software and CooTek Cayman

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

By analyzing existing cross correlation between Boardwalktech Software Corp and CooTek Cayman, you can compare the effects of market volatilities on Boardwalktech Software and CooTek Cayman 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 Boardwalktech Software with a short position of CooTek Cayman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boardwalktech Software and CooTek Cayman.

Diversification Opportunities for Boardwalktech Software and CooTek Cayman

0.31

Correlation Coefficient

Boardwalktech Software  CooTek Cayman

Weak diversification

The 3 months correlation between Boardwalktech and CooTek is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Boardwalktech Software Corp and CooTek Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CooTek Cayman and Boardwalktech Software 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 Boardwalktech Software Corp are associated (or correlated) with CooTek Cayman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CooTek Cayman has no effect on the direction of Boardwalktech Software i.e., Boardwalktech Software and CooTek Cayman go up and down completely randomly.

Pair Corralation between Boardwalktech Software and CooTek Cayman

If you would invest  13.00  in Boardwalktech Software Corp on September 1, 2024 and sell it today you would lose (4.40) from holding Boardwalktech Software Corp or give up 33.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

Boardwalktech Software Corp  vs.  CooTek Cayman

Boardwalktech Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boardwalktech Software Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Boardwalktech Software reported solid returns over the last few months and may actually be approaching a breakup point.

CooTek Cayman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CooTek Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CooTek Cayman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boardwalktech Software and CooTek Cayman

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

The idea behind Boardwalktech Software Corp and CooTek Cayman 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.