Correlation Between Boise Cascade and Lion One
Can any of the company-specific risk be diversified away by investing in both Boise Cascade and Lion One 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 Boise Cascade and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boise Cascade and Lion One Metals, you can compare the effects of market volatilities on Boise Cascade and Lion One 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 Boise Cascade with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boise Cascade and Lion One.
Diversification Opportunities for Boise Cascade and Lion One
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boise and Lion is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Boise Cascade and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Boise Cascade 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 Boise Cascade are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Boise Cascade i.e., Boise Cascade and Lion One go up and down completely randomly.
Pair Corralation between Boise Cascade and Lion One
Assuming the 90 days horizon Boise Cascade is expected to generate 0.54 times more return on investment than Lion One. However, Boise Cascade is 1.84 times less risky than Lion One. It trades about 0.08 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.03 per unit of risk. If you would invest 6,246 in Boise Cascade on September 13, 2024 and sell it today you would earn a total of 7,424 from holding Boise Cascade or generate 118.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boise Cascade vs. Lion One Metals
Performance |
| Timeline |
| Boise Cascade |
| Lion One Metals |
Boise Cascade and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boise Cascade and Lion One
The main advantage of trading using opposite Boise Cascade and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boise Cascade position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Boise Cascade vs. National Beverage Corp | Boise Cascade vs. The Boston Beer | Boise Cascade vs. THAI BEVERAGE | Boise Cascade vs. SCANSOURCE |
| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
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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