Correlation Between Boomer Holdings and School Specialty
Can any of the company-specific risk be diversified away by investing in both Boomer Holdings and School Specialty 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 School Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boomer Holdings and School Specialty, you can compare the effects of market volatilities on Boomer Holdings and School Specialty 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 School Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boomer Holdings and School Specialty.
Diversification Opportunities for Boomer Holdings and School Specialty
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boomer and School is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boomer Holdings and School Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on School Specialty 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 School Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of School Specialty has no effect on the direction of Boomer Holdings i.e., Boomer Holdings and School Specialty go up and down completely randomly.
Pair Corralation between Boomer Holdings and School Specialty
Given the investment horizon of 90 days Boomer Holdings is expected to under-perform the School Specialty. But the pink sheet apears to be less risky and, when comparing its historical volatility, Boomer Holdings is 4.01 times less risky than School Specialty. The pink sheet trades about -0.01 of its potential returns per unit of risk. The School Specialty is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.02 in School Specialty on August 27, 2024 and sell it today you would lose (0.01) from holding School Specialty or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 27.22% |
| Values | Daily Returns |
Boomer Holdings vs. School Specialty
Performance |
| Timeline |
| Boomer Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| School Specialty |
Boomer Holdings and School Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boomer Holdings and School Specialty
The main advantage of trading using opposite Boomer Holdings and School Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boomer Holdings position performs unexpectedly, School Specialty 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 School Specialty will offset losses from the drop in School Specialty's long position.The idea behind Boomer Holdings and School Specialty 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.| School Specialty vs. Card Factory plc | School Specialty vs. Ceconomy AG ADR | School Specialty vs. Bowlin Travel Centers | School Specialty 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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