Correlation Between Boss Energy and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Boss Energy and AiMedia 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 Boss Energy and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boss Energy Limited and AiMedia Technologies, you can compare the effects of market volatilities on Boss Energy and AiMedia 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 Boss Energy with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boss Energy and AiMedia Technologies.
Diversification Opportunities for Boss Energy and AiMedia Technologies
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boss and AiMedia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Boss Energy Limited and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Boss Energy 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 Boss Energy Limited are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Boss Energy i.e., Boss Energy and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Boss Energy and AiMedia Technologies
Assuming the 90 days trading horizon Boss Energy Limited is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Boss Energy Limited is 1.88 times less risky than AiMedia Technologies. The stock trades about -0.23 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 80.00 in AiMedia Technologies on September 4, 2024 and sell it today you would lose (1.00) from holding AiMedia Technologies or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boss Energy Limited vs. AiMedia Technologies
Performance |
| Timeline |
| Boss Energy Limited |
| AiMedia Technologies |
Boss Energy and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boss Energy and AiMedia Technologies
The main advantage of trading using opposite Boss Energy and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boss Energy position performs unexpectedly, AiMedia 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Boss Energy vs. AiMedia Technologies | Boss Energy vs. Hotel Property Investments | Boss Energy vs. National Storage REIT | Boss Energy vs. Platinum Asset Management |
| AiMedia Technologies vs. Pengana Private Equity | AiMedia Technologies vs. PM Capital Global | AiMedia Technologies vs. Wam Leaders | AiMedia Technologies vs. Staude Capital Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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