Correlation Between Frontier Transport and Boxer Retail
Can any of the company-specific risk be diversified away by investing in both Frontier Transport and Boxer Retail 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 Frontier Transport and Boxer Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Transport Holdings and Boxer Retail, you can compare the effects of market volatilities on Frontier Transport and Boxer Retail 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 Frontier Transport with a short position of Boxer Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Transport and Boxer Retail.
Diversification Opportunities for Frontier Transport and Boxer Retail
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Frontier and Boxer is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Transport Holdings and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail and Frontier Transport 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 Frontier Transport Holdings are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of Frontier Transport i.e., Frontier Transport and Boxer Retail go up and down completely randomly.
Pair Corralation between Frontier Transport and Boxer Retail
Assuming the 90 days trading horizon Frontier Transport is expected to generate 3.78 times less return on investment than Boxer Retail. But when comparing it to its historical volatility, Frontier Transport Holdings is 1.06 times less risky than Boxer Retail. It trades about 0.06 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 540,000 in Boxer Retail on September 24, 2024 and sell it today you would earn a total of 100,000 from holding Boxer Retail or generate 18.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 7.69% |
Values | Daily Returns |
Frontier Transport Holdings vs. Boxer Retail
Performance |
Timeline |
Frontier Transport |
Boxer Retail |
Frontier Transport and Boxer Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Frontier Transport and Boxer Retail
The main advantage of trading using opposite Frontier Transport and Boxer Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Transport position performs unexpectedly, Boxer Retail 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 Boxer Retail will offset losses from the drop in Boxer Retail's long position.Frontier Transport vs. Capitec Bank Holdings | Frontier Transport vs. We Buy Cars | Frontier Transport vs. Discovery Holdings | Frontier Transport vs. Dipula Income |
Boxer Retail vs. Prosus NV | Boxer Retail vs. Compagnie Financire Richemont | Boxer Retail vs. British American Tobacco | Boxer Retail vs. Anglo American PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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