Correlation Between United States and Boise Cascad

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

By analyzing existing cross correlation between United States Lime and Boise Cascad Llc, you can compare the effects of market volatilities on United States and Boise Cascad 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 United States with a short position of Boise Cascad. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Boise Cascad.

Diversification Opportunities for United States and Boise Cascad

0.17

Correlation Coefficient

United States  Boise Cascad

Average diversification

The 3 months correlation between United and Boise is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding United States Lime and Boise Cascad Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boise Cascad Llc and United States 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 United States Lime are associated (or correlated) with Boise Cascad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boise Cascad Llc has no effect on the direction of United States i.e., United States and Boise Cascad go up and down completely randomly.

Pair Corralation between United States and Boise Cascad

Given the investment horizon of 90 days United States Lime is expected to generate 1.68 times more return on investment than Boise Cascad. However, United States is 1.68 times more volatile than Boise Cascad Llc. It trades about -0.35 of its potential returns per unit of risk. Boise Cascad Llc is currently generating about -0.62 per unit of risk. If you would invest  14,362  in United States Lime on October 11, 2024 and sell it today you would lose (2,426) from holding United States Lime or give up 16.89% of portfolio value over 90 days.

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

United States Lime  vs.  Boise Cascad Llc

United States Lime

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Lime are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, United States displayed solid returns over the last few months and may actually be approaching a breakup point.

Boise Cascad Llc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boise Cascad Llc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with United States and Boise Cascad

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

The idea behind United States Lime and Boise Cascad Llc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.