Correlation Between Pardee Resources and Boswell J

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

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

Diversification Opportunities for Pardee Resources and Boswell J

0.4

Correlation Coefficient

Pardee Resources  Boswell J

Very weak diversification

The 3 months correlation between Pardee and Boswell is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pardee Resources Co 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 Pardee Resources 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 Pardee Resources Co 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 Pardee Resources i.e., Pardee Resources and Boswell J go up and down completely randomly.

Pair Corralation between Pardee Resources and Boswell J

Given the investment horizon of 90 days Pardee Resources is expected to generate 1.11 times less return on investment than Boswell J. But when comparing it to its historical volatility, Pardee Resources Co is 1.62 times less risky than Boswell J. It trades about 0.1 of its potential returns per unit of risk. Boswell J G is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  54,625  in Boswell J G on September 3, 2024 and sell it today you would earn a total of  3,175  from holding Boswell J G or generate 5.81% return on investment over 90 days.

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

Pardee Resources Co  vs.  Boswell J G

Pardee Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pardee Resources Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Pardee Resources is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Boswell J G

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boswell J G are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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 Pardee Resources and Boswell J

The main advantage of trading using opposite Pardee Resources and Boswell J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pardee Resources 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 Pardee Resources Co 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.