Correlation Between Boosh Plant and Premium Brands

Can any of the company-specific risk be diversified away by investing in both Boosh Plant and Premium Brands 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 Boosh Plant and Premium Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boosh Plant Based Brands and Premium Brands Holdings, you can compare the effects of market volatilities on Boosh Plant and Premium Brands 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 Boosh Plant with a short position of Premium Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boosh Plant and Premium Brands.

Diversification Opportunities for Boosh Plant and Premium Brands

-0.49

Correlation Coefficient

Boosh Plant  Premium Brands

Very good diversification

The 3 months correlation between Boosh and Premium is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Boosh Plant Based Brands and Premium Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Brands Holdings and Boosh Plant 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 Boosh Plant Based Brands are associated (or correlated) with Premium Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Brands Holdings has no effect on the direction of Boosh Plant i.e., Boosh Plant and Premium Brands go up and down completely randomly.

Pair Corralation between Boosh Plant and Premium Brands

Assuming the 90 days horizon Boosh Plant Based Brands is expected to generate 22.81 times more return on investment than Premium Brands. However, Boosh Plant is 22.81 times more volatile than Premium Brands Holdings. It trades about 0.19 of its potential returns per unit of risk. Premium Brands Holdings is currently generating about -0.04 per unit of risk. If you would invest  0.28  in Boosh Plant Based Brands on September 28, 2024 and sell it today you would earn a total of  0.72  from holding Boosh Plant Based Brands or generate 257.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.97%
Values	Daily Returns

Boosh Plant Based Brands  vs.  Premium Brands Holdings

Boosh Plant Based

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boosh Plant Based Brands are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Boosh Plant reported solid returns over the last few months and may actually be approaching a breakup point.

Premium Brands Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premium Brands Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Boosh Plant and Premium Brands

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

The idea behind Boosh Plant Based Brands and Premium Brands 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.