Correlation Between Boston Omaha and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Boston Omaha and HE Equipment 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 Boston Omaha and HE Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Omaha Corp and HE Equipment Services, you can compare the effects of market volatilities on Boston Omaha and HE Equipment 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 Boston Omaha with a short position of HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Omaha and HE Equipment.
Diversification Opportunities for Boston Omaha and HE Equipment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and HEES is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services and Boston Omaha 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 Boston Omaha Corp are associated (or correlated) with HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Boston Omaha i.e., Boston Omaha and HE Equipment go up and down completely randomly.
Pair Corralation between Boston Omaha and HE Equipment
Considering the 90-day investment horizon Boston Omaha is expected to generate 4.76 times less return on investment than HE Equipment. But when comparing it to its historical volatility, Boston Omaha Corp is 1.36 times less risky than HE Equipment. It trades about 0.01 of its potential returns per unit of risk. HE Equipment Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,471 in HE Equipment Services on September 14, 2024 and sell it today you would earn a total of 1,095 from holding HE Equipment Services or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Omaha Corp vs. HE Equipment Services
Performance |
| Timeline |
| Boston Omaha Corp |
| HE Equipment Services |
Boston Omaha and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Omaha and HE Equipment
The main advantage of trading using opposite Boston Omaha and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Omaha position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment's long position.| Boston Omaha vs. Mirriad Advertising plc | Boston Omaha vs. INEO Tech Corp | Boston Omaha vs. Kidoz Inc | Boston Omaha vs. Marchex |
| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Herc Holdings | HE Equipment vs. Alta Equipment Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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