Correlation Between Winmark and Boqii Holding

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

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

Diversification Opportunities for Winmark and Boqii Holding

-0.37

Correlation Coefficient

Winmark  Boqii Holding

Very good diversification

The 3 months correlation between Winmark and Boqii is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Boqii Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding Limited and Winmark 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 Winmark are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding Limited has no effect on the direction of Winmark i.e., Winmark and Boqii Holding go up and down completely randomly.

Pair Corralation between Winmark and Boqii Holding

Given the investment horizon of 90 days Winmark is expected to generate 1.93 times less return on investment than Boqii Holding. But when comparing it to its historical volatility, Winmark is 6.77 times less risky than Boqii Holding. It trades about 0.07 of its potential returns per unit of risk. Boqii Holding Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Boqii Holding Limited on September 23, 2024 and sell it today you would lose (96.00) from holding Boqii Holding Limited or give up 76.8% of portfolio value over 90 days.

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

Winmark  vs.  Boqii Holding Limited

Winmark

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Winmark are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winmark may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Boqii Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Winmark and Boqii Holding

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

The idea behind Winmark and Boqii Holding 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.