Correlation Between Boomer Holdings and Dixons Carphone
Can any of the company-specific risk be diversified away by investing in both Boomer Holdings and Dixons Carphone 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 Boomer Holdings and Dixons Carphone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boomer Holdings and Dixons Carphone plc, you can compare the effects of market volatilities on Boomer Holdings and Dixons Carphone 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 Boomer Holdings with a short position of Dixons Carphone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boomer Holdings and Dixons Carphone.
Diversification Opportunities for Boomer Holdings and Dixons Carphone
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boomer and Dixons is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boomer Holdings and Dixons Carphone plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dixons Carphone plc and Boomer Holdings 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 Boomer Holdings are associated (or correlated) with Dixons Carphone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dixons Carphone plc has no effect on the direction of Boomer Holdings i.e., Boomer Holdings and Dixons Carphone go up and down completely randomly.
Pair Corralation between Boomer Holdings and Dixons Carphone
If you would invest 118.00 in Dixons Carphone plc on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Dixons Carphone plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Boomer Holdings vs. Dixons Carphone plc
Performance |
| Timeline |
| Boomer Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dixons Carphone plc |
Boomer Holdings and Dixons Carphone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boomer Holdings and Dixons Carphone
The main advantage of trading using opposite Boomer Holdings and Dixons Carphone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boomer Holdings position performs unexpectedly, Dixons Carphone 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 Dixons Carphone will offset losses from the drop in Dixons Carphone's long position.The idea behind Boomer Holdings and Dixons Carphone plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dixons Carphone vs. Nasdaq Inc | Dixons Carphone vs. Aldel Financial II | Dixons Carphone vs. Tandem Diabetes Care | Dixons Carphone vs. National Vision Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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