Correlation Between Bowlin Travel and Corfacts

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

By analyzing existing cross correlation between Bowlin Travel Centers and Corfacts, you can compare the effects of market volatilities on Bowlin Travel and Corfacts 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 Bowlin Travel with a short position of Corfacts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowlin Travel and Corfacts.

Diversification Opportunities for Bowlin Travel and Corfacts

0.0

Correlation Coefficient

Bowlin Travel  Corfacts

Pay attention - limited upside

The 3 months correlation between Bowlin and Corfacts is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bowlin Travel Centers and Corfacts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corfacts and Bowlin Travel 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 Bowlin Travel Centers are associated (or correlated) with Corfacts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corfacts has no effect on the direction of Bowlin Travel i.e., Bowlin Travel and Corfacts go up and down completely randomly.

Pair Corralation between Bowlin Travel and Corfacts

If you would invest  0.01  in Corfacts on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Corfacts or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Bowlin Travel Centers  vs.  Corfacts

Bowlin Travel Centers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowlin Travel Centers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bowlin Travel is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Corfacts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corfacts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Corfacts is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bowlin Travel and Corfacts

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

The idea behind Bowlin Travel Centers and Corfacts 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.