Correlation Between BOS Better and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both BOS Better and Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions International, you can compare the effects of market volatilities on BOS Better and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and Flexible Solutions.
Diversification Opportunities for BOS Better and Flexible Solutions
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOS and Flexible is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of BOS Better i.e., BOS Better and Flexible Solutions go up and down completely randomly.
Pair Corralation between BOS Better and Flexible Solutions
Given the investment horizon of 90 days BOS Better is expected to generate 3.68 times less return on investment than Flexible Solutions. But when comparing it to its historical volatility, BOS Better Online is 1.57 times less risky than Flexible Solutions. It trades about 0.02 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Flexible Solutions International on September 3, 2024 and sell it today you would earn a total of 143.00 from holding Flexible Solutions International or generate 52.57% 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. Flexible Solutions Internation
Performance |
| Timeline |
| BOS Better Online |
| Flexible Solutions |
BOS Better and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and Flexible Solutions
The main advantage of trading using opposite BOS Better and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| BOS Better vs. Highway Holdings Limited | BOS Better vs. QCR Holdings | BOS Better vs. Partner Communications | BOS Better vs. Acumen Pharmaceuticals |
| Flexible Solutions vs. SPACE | Flexible Solutions vs. Bayview Acquisition Corp | Flexible Solutions vs. T Rowe Price | Flexible Solutions vs. Ampleforth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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