Correlation Between Extreme Networks and BOS Better
Can any of the company-specific risk be diversified away by investing in both Extreme Networks and BOS Better 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 Extreme Networks and BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extreme Networks and BOS Better Online, you can compare the effects of market volatilities on Extreme Networks and BOS Better 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 Extreme Networks with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extreme Networks and BOS Better.
Diversification Opportunities for Extreme Networks and BOS Better
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Extreme and BOS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Extreme Networks and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and Extreme Networks 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 Extreme Networks are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Extreme Networks i.e., Extreme Networks and BOS Better go up and down completely randomly.
Pair Corralation between Extreme Networks and BOS Better
Given the investment horizon of 90 days Extreme Networks is expected to under-perform the BOS Better. But the stock apears to be less risky and, when comparing its historical volatility, Extreme Networks is 1.38 times less risky than BOS Better. The stock trades about -0.05 of its potential returns per unit of risk. The BOS Better Online is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 372.00 in BOS Better Online on December 2, 2024 and sell it today you would earn a total of 19.00 from holding BOS Better Online or generate 5.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Extreme Networks vs. BOS Better Online
Performance |
Timeline |
Extreme Networks |
BOS Better Online |
Extreme Networks and BOS Better Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Extreme Networks and BOS Better
The main advantage of trading using opposite Extreme Networks and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extreme Networks position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.Extreme Networks vs. Knowles Cor | Extreme Networks vs. KVH Industries | Extreme Networks vs. Comtech Telecommunications Corp | Extreme Networks vs. EchoStar |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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