Correlation Between Boyaa Interactive and FARO Technologies
Can any of the company-specific risk be diversified away by investing in both Boyaa Interactive and FARO Technologies 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 Boyaa Interactive and FARO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyaa Interactive International and FARO Technologies, you can compare the effects of market volatilities on Boyaa Interactive and FARO Technologies 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 Boyaa Interactive with a short position of FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyaa Interactive and FARO Technologies.
Diversification Opportunities for Boyaa Interactive and FARO Technologies
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyaa and FARO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Boyaa Interactive Internationa and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies and Boyaa Interactive 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 Boyaa Interactive International are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of Boyaa Interactive i.e., Boyaa Interactive and FARO Technologies go up and down completely randomly.
Pair Corralation between Boyaa Interactive and FARO Technologies
Assuming the 90 days horizon Boyaa Interactive International is expected to generate 1.12 times more return on investment than FARO Technologies. However, Boyaa Interactive is 1.12 times more volatile than FARO Technologies. It trades about 0.6 of its potential returns per unit of risk. FARO Technologies is currently generating about 0.29 per unit of risk. If you would invest 18.00 in Boyaa Interactive International on August 26, 2024 and sell it today you would earn a total of 35.00 from holding Boyaa Interactive International or generate 194.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyaa Interactive Internationa vs. FARO Technologies
Performance |
| Timeline |
| Boyaa Interactive |
| FARO Technologies |
Boyaa Interactive and FARO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyaa Interactive and FARO Technologies
The main advantage of trading using opposite Boyaa Interactive and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyaa Interactive position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.| Boyaa Interactive vs. AAC TECHNOLOGHLDGADR | Boyaa Interactive vs. Uber Technologies | Boyaa Interactive vs. Digilife Technologies Limited | Boyaa Interactive vs. Norwegian Air Shuttle |
| FARO Technologies vs. Novanta | FARO Technologies vs. Superior Plus Corp | FARO Technologies vs. Origin Agritech | FARO Technologies vs. Identiv |
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.
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