Correlation Between Stagwell and BOS Better

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Can any of the company-specific risk be diversified away by investing in both Stagwell and BOS Better 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 Stagwell and BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and BOS Better Online, you can compare the effects of market volatilities on Stagwell and BOS Better 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 Stagwell with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and BOS Better.

Diversification Opportunities for Stagwell and BOS Better

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Stagwell and BOS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and Stagwell 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 Stagwell are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Stagwell i.e., Stagwell and BOS Better go up and down completely randomly.

Pair Corralation between Stagwell and BOS Better

Given the investment horizon of 90 days Stagwell is expected to generate 3.93 times less return on investment than BOS Better. In addition to that, Stagwell is 1.35 times more volatile than BOS Better Online. It trades about 0.01 of its total potential returns per unit of risk. BOS Better Online is currently generating about 0.05 per unit of volatility. If you would invest  225.00  in BOS Better Online on October 13, 2024 and sell it today you would earn a total of  140.00  from holding BOS Better Online or generate 62.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Stagwell  vs.  BOS Better Online

 Performance 
       Timeline  
Stagwell 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
BOS Better Online 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

Stagwell and BOS Better Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stagwell and BOS Better

The main advantage of trading using opposite Stagwell and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.
The idea behind Stagwell and BOS Better Online 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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