Correlation Between Bon Natural and Better Choice
Can any of the company-specific risk be diversified away by investing in both Bon Natural and Better Choice 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 Bon Natural and Better Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and Better Choice, you can compare the effects of market volatilities on Bon Natural and Better Choice 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 Bon Natural with a short position of Better Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Better Choice.
Diversification Opportunities for Bon Natural and Better Choice
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bon and Better is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Better Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Choice and Bon Natural 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 Bon Natural Life are associated (or correlated) with Better Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Choice has no effect on the direction of Bon Natural i.e., Bon Natural and Better Choice go up and down completely randomly.
Pair Corralation between Bon Natural and Better Choice
Considering the 90-day investment horizon Bon Natural Life is expected to generate 0.65 times more return on investment than Better Choice. However, Bon Natural Life is 1.54 times less risky than Better Choice. It trades about -0.08 of its potential returns per unit of risk. Better Choice is currently generating about -0.07 per unit of risk. If you would invest 292.00 in Bon Natural Life on August 24, 2024 and sell it today you would lose (134.00) from holding Bon Natural Life or give up 45.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. Better Choice
Performance |
| Timeline |
| Bon Natural Life |
| Better Choice |
Bon Natural and Better Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Better Choice
The main advantage of trading using opposite Bon Natural and Better Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural position performs unexpectedly, Better Choice 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 Better Choice will offset losses from the drop in Better Choice's long position.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
| Better Choice vs. Blue Star Foods | Better Choice vs. Stryve Foods | Better Choice vs. BioAdaptives | Better Choice vs. Beyond Oil |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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