Correlation Between Spirit Telecom and Boss Energy

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

By analyzing existing cross correlation between Spirit Telecom and Boss Energy Limited, you can compare the effects of market volatilities on Spirit Telecom and Boss Energy 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 Spirit Telecom with a short position of Boss Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Telecom and Boss Energy.

Diversification Opportunities for Spirit Telecom and Boss Energy

0.16

Correlation Coefficient

Spirit Telecom  Boss Energy

Average diversification

The 3 months correlation between Spirit and Boss is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Telecom and Boss Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Energy Limited and Spirit Telecom 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 Spirit Telecom are associated (or correlated) with Boss Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Energy Limited has no effect on the direction of Spirit Telecom i.e., Spirit Telecom and Boss Energy go up and down completely randomly.

Pair Corralation between Spirit Telecom and Boss Energy

Assuming the 90 days trading horizon Spirit Telecom is expected to under-perform the Boss Energy. But the stock apears to be less risky and, when comparing its historical volatility, Spirit Telecom is 1.29 times less risky than Boss Energy. The stock trades about -0.11 of its potential returns per unit of risk. The Boss Energy Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Boss Energy Limited on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Boss Energy Limited or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Spirit Telecom  vs.  Boss Energy Limited

Spirit Telecom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spirit Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Boss Energy Limited

Risk-Adjusted Performance

Weak

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

Pair Trading with Spirit Telecom and Boss Energy

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

The idea behind Spirit Telecom and Boss Energy Limited 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.