Correlation Between BOOM LOGISTICS and Apple

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

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

Diversification Opportunities for BOOM LOGISTICS and Apple

0.14

Correlation Coefficient

BOOM LOGISTICS  Apple

Average diversification

The 3 months correlation between BOOM and Apple is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BOOM LOGISTICS LTD and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and BOOM LOGISTICS 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 BOOM LOGISTICS LTD are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of BOOM LOGISTICS i.e., BOOM LOGISTICS and Apple go up and down completely randomly.

Pair Corralation between BOOM LOGISTICS and Apple

Assuming the 90 days horizon BOOM LOGISTICS LTD is expected to generate 5.78 times more return on investment than Apple. However, BOOM LOGISTICS is 5.78 times more volatile than Apple Inc. It trades about 0.04 of its potential returns per unit of risk. Apple Inc is currently generating about 0.11 per unit of risk. If you would invest  91.00  in BOOM LOGISTICS LTD on September 20, 2024 and sell it today you would lose (9.00) from holding BOOM LOGISTICS LTD or give up 9.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BOOM LOGISTICS LTD  vs.  Apple Inc

BOOM LOGISTICS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BOOM LOGISTICS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BOOM LOGISTICS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Apple Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BOOM LOGISTICS and Apple

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

The idea behind BOOM LOGISTICS LTD and Apple 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.