Correlation Between Nutrien and Boswell J

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

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

Diversification Opportunities for Nutrien and Boswell J

-0.09

Correlation Coefficient

Nutrien  Boswell J

Good diversification

The 3 months correlation between Nutrien and Boswell is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nutrien and Boswell J G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boswell J G and Nutrien 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 Nutrien are associated (or correlated) with Boswell J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boswell J G has no effect on the direction of Nutrien i.e., Nutrien and Boswell J go up and down completely randomly.

Pair Corralation between Nutrien and Boswell J

Considering the 90-day investment horizon Nutrien is expected to generate 1.78 times more return on investment than Boswell J. However, Nutrien is 1.78 times more volatile than Boswell J G. It trades about 0.12 of its potential returns per unit of risk. Boswell J G is currently generating about -0.07 per unit of risk. If you would invest  4,364  in Nutrien on December 29, 2024 and sell it today you would earn a total of  646.00  from holding Nutrien or generate 14.8% return on investment over 90 days.

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

Nutrien  vs.  Boswell J G

Nutrien

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Nutrien reported solid returns over the last few months and may actually be approaching a breakup point.

Boswell J G

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boswell J G has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Boswell J is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nutrien and Boswell J

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

The idea behind Nutrien and Boswell J G 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.