Correlation Between Aristocrat Leisure and Boiron SA
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Boiron SA 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 Aristocrat Leisure and Boiron SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Boiron SA, you can compare the effects of market volatilities on Aristocrat Leisure and Boiron SA 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 Aristocrat Leisure with a short position of Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Boiron SA.
Diversification Opportunities for Aristocrat Leisure and Boiron SA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristocrat and Boiron is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Boiron SA go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Boiron SA
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 0.83 times more return on investment than Boiron SA. However, Aristocrat Leisure Limited is 1.21 times less risky than Boiron SA. It trades about 0.09 of its potential returns per unit of risk. Boiron SA is currently generating about -0.01 per unit of risk. If you would invest 2,015 in Aristocrat Leisure Limited on September 4, 2024 and sell it today you would earn a total of 2,125 from holding Aristocrat Leisure Limited or generate 105.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Boiron SA
Performance |
| Timeline |
| Aristocrat Leisure |
| Boiron SA |
Aristocrat Leisure and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Boiron SA
The main advantage of trading using opposite Aristocrat Leisure and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| Aristocrat Leisure vs. Big 5 Sporting | Aristocrat Leisure vs. NORTHEAST UTILITIES | Aristocrat Leisure vs. Entravision Communications | Aristocrat Leisure vs. NTG Nordic Transport |
| Boiron SA vs. Eli Lilly and | Boiron SA vs. AbbVie Inc | Boiron SA vs. Pfizer Inc | Boiron SA vs. Superior Plus Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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