Correlation Between Boohoo PLC and Hour Loop
Can any of the company-specific risk be diversified away by investing in both Boohoo PLC and Hour Loop 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 Boohoo PLC and Hour Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BoohooCom PLC ADR and Hour Loop, you can compare the effects of market volatilities on Boohoo PLC and Hour Loop 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 Boohoo PLC with a short position of Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boohoo PLC and Hour Loop.
Diversification Opportunities for Boohoo PLC and Hour Loop
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boohoo and Hour is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BoohooCom PLC ADR and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop and Boohoo PLC 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 BoohooCom PLC ADR are associated (or correlated) with Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of Boohoo PLC i.e., Boohoo PLC and Hour Loop go up and down completely randomly.
Pair Corralation between Boohoo PLC and Hour Loop
Assuming the 90 days horizon BoohooCom PLC ADR is expected to generate 0.62 times more return on investment than Hour Loop. However, BoohooCom PLC ADR is 1.62 times less risky than Hour Loop. It trades about 0.01 of its potential returns per unit of risk. Hour Loop is currently generating about -0.01 per unit of risk. If you would invest 823.00 in BoohooCom PLC ADR on September 3, 2024 and sell it today you would lose (2.00) from holding BoohooCom PLC ADR or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BoohooCom PLC ADR vs. Hour Loop
Performance |
| Timeline |
| BoohooCom PLC ADR |
| Hour Loop |
Boohoo PLC and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boohoo PLC and Hour Loop
The main advantage of trading using opposite Boohoo PLC and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boohoo PLC position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop's long position.| Boohoo PLC vs. TSS, Common Stock | Boohoo PLC vs. Aquagold International | Boohoo PLC vs. Morningstar Unconstrained Allocation | Boohoo PLC vs. High Yield Municipal Fund |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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