Correlation Between Boqii Holding and OReilly Automotive
Can any of the company-specific risk be diversified away by investing in both Boqii Holding and OReilly Automotive 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 Boqii Holding and OReilly Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boqii Holding Limited and OReilly Automotive, you can compare the effects of market volatilities on Boqii Holding and OReilly Automotive 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 Boqii Holding with a short position of OReilly Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and OReilly Automotive.
Diversification Opportunities for Boqii Holding and OReilly Automotive
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boqii and OReilly is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and OReilly Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OReilly Automotive and Boqii Holding 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 Boqii Holding Limited are associated (or correlated) with OReilly Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OReilly Automotive has no effect on the direction of Boqii Holding i.e., Boqii Holding and OReilly Automotive go up and down completely randomly.
Pair Corralation between Boqii Holding and OReilly Automotive
Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 10.18 times more return on investment than OReilly Automotive. However, Boqii Holding is 10.18 times more volatile than OReilly Automotive. It trades about 0.03 of its potential returns per unit of risk. OReilly Automotive is currently generating about 0.07 per unit of risk. If you would invest 142.00 in Boqii Holding Limited on August 27, 2024 and sell it today you would lose (92.00) from holding Boqii Holding Limited or give up 64.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boqii Holding Limited vs. OReilly Automotive
Performance |
| Timeline |
| Boqii Holding Limited |
| OReilly Automotive |
Boqii Holding and OReilly Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boqii Holding and OReilly Automotive
The main advantage of trading using opposite Boqii Holding and OReilly Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boqii Holding position performs unexpectedly, OReilly Automotive 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 OReilly Automotive will offset losses from the drop in OReilly Automotive's long position.| Boqii Holding vs. Sea | Boqii Holding vs. Wayfair | Boqii Holding vs. Chewy Inc | Boqii Holding vs. Vipshop Holdings Limited |
| OReilly Automotive vs. Kingsway Financial Services | OReilly Automotive vs. KAR Auction Services | OReilly Automotive vs. Cango Inc | OReilly Automotive vs. Vroom Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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