Correlation Between Old Republic and Bosideng International

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

By analyzing existing cross correlation between Old Republic International and Bosideng International Holdings, you can compare the effects of market volatilities on Old Republic and Bosideng International 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 Old Republic with a short position of Bosideng International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Bosideng International.

Diversification Opportunities for Old Republic and Bosideng International

-0.09

Correlation Coefficient

Old Republic  Bosideng International

Good diversification

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

Pair Corralation between Old Republic and Bosideng International

Considering the 90-day investment horizon Old Republic is expected to generate 1.47 times less return on investment than Bosideng International. But when comparing it to its historical volatility, Old Republic International is 4.18 times less risky than Bosideng International. It trades about 0.1 of its potential returns per unit of risk. Bosideng International Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,206  in Bosideng International Holdings on October 10, 2024 and sell it today you would earn a total of  264.00  from holding Bosideng International Holdings or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Old Republic International  vs.  Bosideng International Holding

Old Republic Interna

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Old Republic International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Old Republic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bosideng International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bosideng International Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Bosideng International may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Old Republic and Bosideng International

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

The idea behind Old Republic International and Bosideng International Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.