Correlation Between CHINA SOUTHN and BOS BETTER

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

By analyzing existing cross correlation between CHINA SOUTHN AIR H and BOS BETTER ONLINE, you can compare the effects of market volatilities on CHINA SOUTHN 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 CHINA SOUTHN with a short position of BOS BETTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and BOS BETTER.

Diversification Opportunities for CHINA SOUTHN and BOS BETTER

0.0

Correlation Coefficient

CHINA SOUTHN  BOS BETTER

Pay attention - limited upside

The 3 months correlation between CHINA and BOS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H 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 CHINA SOUTHN 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 CHINA SOUTHN AIR H 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 CHINA SOUTHN i.e., CHINA SOUTHN and BOS BETTER go up and down completely randomly.

Pair Corralation between CHINA SOUTHN and BOS BETTER

If you would invest  44.00  in CHINA SOUTHN AIR H on October 25, 2024 and sell it today you would earn a total of  1.00  from holding CHINA SOUTHN AIR H or generate 2.27% return on investment over 90 days.

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

CHINA SOUTHN AIR H   vs.  BOS BETTER ONLINE

CHINA SOUTHN AIR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA SOUTHN AIR H are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CHINA SOUTHN unveiled solid returns over the last few months and may actually be approaching a breakup point.

BOS BETTER ONLINE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BOS BETTER ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BOS BETTER is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CHINA SOUTHN and BOS BETTER

The main advantage of trading using opposite CHINA SOUTHN and BOS BETTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN 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 CHINA SOUTHN AIR H 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.