Correlation Between Boomer Holdings and ODP Corp
Can any of the company-specific risk be diversified away by investing in both Boomer Holdings and ODP Corp 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 ODP Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boomer Holdings and ODP Corp, you can compare the effects of market volatilities on Boomer Holdings and ODP Corp 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 ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boomer Holdings and ODP Corp.
Diversification Opportunities for Boomer Holdings and ODP Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boomer and ODP is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Boomer Holdings and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp 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 ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of Boomer Holdings i.e., Boomer Holdings and ODP Corp go up and down completely randomly.
Pair Corralation between Boomer Holdings and ODP Corp
If you would invest 0.04 in Boomer Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Boomer Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Boomer Holdings vs. ODP Corp
Performance |
| Timeline |
| Boomer Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ODP Corp |
Boomer Holdings and ODP Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boomer Holdings and ODP Corp
The main advantage of trading using opposite Boomer Holdings and ODP Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boomer Holdings position performs unexpectedly, ODP Corp 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 ODP Corp will offset losses from the drop in ODP Corp's long position.The idea behind Boomer Holdings and ODP Corp 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.| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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