Correlation Between BOS Better and Luna Innovations
Can any of the company-specific risk be diversified away by investing in both BOS Better and Luna Innovations 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 Luna Innovations 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 Luna Innovations Incorporated, you can compare the effects of market volatilities on BOS Better and Luna Innovations 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 Luna Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and Luna Innovations.
Diversification Opportunities for BOS Better and Luna Innovations
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOS and Luna is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Luna Innovations Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luna Innovations 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 Luna Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luna Innovations has no effect on the direction of BOS Better i.e., BOS Better and Luna Innovations go up and down completely randomly.
Pair Corralation between BOS Better and Luna Innovations
Given the investment horizon of 90 days BOS Better Online is expected to generate 0.48 times more return on investment than Luna Innovations. However, BOS Better Online is 2.09 times less risky than Luna Innovations. It trades about 0.01 of its potential returns per unit of risk. Luna Innovations Incorporated is currently generating about -0.06 per unit of risk. If you would invest 333.00 in BOS Better Online on August 28, 2024 and sell it today you would earn a total of 4.00 from holding BOS Better Online or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. Luna Innovations Incorporated
Performance |
| Timeline |
| BOS Better Online |
| Luna Innovations |
BOS Better and Luna Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and Luna Innovations
The main advantage of trading using opposite BOS Better and Luna Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, Luna Innovations 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 Luna Innovations will offset losses from the drop in Luna Innovations' 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 |
| Luna Innovations vs. ESCO Technologies | Luna Innovations vs. Know Labs | Luna Innovations vs. Focus Universal | Luna Innovations vs. Sono Tek Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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