Correlation Between BOS Better and SEP Acquisition
Can any of the company-specific risk be diversified away by investing in both BOS Better and SEP Acquisition 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 SEP Acquisition 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 SEP Acquisition Corp, you can compare the effects of market volatilities on BOS Better and SEP Acquisition 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 SEP Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and SEP Acquisition.
Diversification Opportunities for BOS Better and SEP Acquisition
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOS and SEP is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and SEP Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEP Acquisition Corp 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 SEP Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEP Acquisition Corp has no effect on the direction of BOS Better i.e., BOS Better and SEP Acquisition go up and down completely randomly.
Pair Corralation between BOS Better and SEP Acquisition
Given the investment horizon of 90 days BOS Better is expected to generate 1.49 times less return on investment than SEP Acquisition. But when comparing it to its historical volatility, BOS Better Online is 2.14 times less risky than SEP Acquisition. It trades about 0.04 of its potential returns per unit of risk. SEP Acquisition Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 975.00 in SEP Acquisition Corp on September 14, 2024 and sell it today you would earn a total of 51.00 from holding SEP Acquisition Corp or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.08% |
| Values | Daily Returns |
BOS Better Online vs. SEP Acquisition Corp
Performance |
| Timeline |
| BOS Better Online |
| SEP Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BOS Better and SEP Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and SEP Acquisition
The main advantage of trading using opposite BOS Better and SEP Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, SEP Acquisition 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 SEP Acquisition will offset losses from the drop in SEP Acquisition's long position.| BOS Better vs. Passage Bio | BOS Better vs. Black Diamond Therapeutics | BOS Better vs. Alector | BOS Better vs. Century Therapeutics |
| SEP Acquisition vs. AMCON Distributing | SEP Acquisition vs. Acco Brands | SEP Acquisition vs. Skillful Craftsman Education | SEP Acquisition vs. John Wiley Sons |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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