Correlation Between BOS Better and First Community
Can any of the company-specific risk be diversified away by investing in both BOS Better and First Community 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 BOS Better and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOS Better Online and First Community Bancshares, you can compare the effects of market volatilities on BOS Better and First Community 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 BOS Better with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and First Community.
Diversification Opportunities for BOS Better and First Community
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOS and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and First Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Banc and BOS Better 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 BOS Better Online are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Banc has no effect on the direction of BOS Better i.e., BOS Better and First Community go up and down completely randomly.
Pair Corralation between BOS Better and First Community
Given the investment horizon of 90 days BOS Better is expected to generate 2.47 times less return on investment than First Community. In addition to that, BOS Better is 1.16 times more volatile than First Community Bancshares. It trades about 0.02 of its total potential returns per unit of risk. First Community Bancshares is currently generating about 0.07 per unit of volatility. If you would invest 2,932 in First Community Bancshares on August 31, 2024 and sell it today you would earn a total of 1,685 from holding First Community Bancshares or generate 57.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. First Community Bancshares
Performance |
| Timeline |
| BOS Better Online |
| First Community Banc |
BOS Better and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and First Community
The main advantage of trading using opposite BOS Better and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community's long position.| BOS Better vs. Mynaric AG ADR | BOS Better vs. Knowles Cor | BOS Better vs. Comtech Telecommunications Corp | BOS Better vs. Ituran Location and |
| First Community vs. WiMi Hologram Cloud | First Community vs. BOS Better Online | First Community vs. Entravision Communications | First Community vs. Magnite |
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 Stocks Directory module to find actively traded stocks across global markets.
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