Correlation Between Boswell J and E I
Can any of the company-specific risk be diversified away by investing in both Boswell J and E I 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 Boswell J and E I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boswell J G and E I du, you can compare the effects of market volatilities on Boswell J and E I 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 Boswell J with a short position of E I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boswell J and E I.
Diversification Opportunities for Boswell J and E I
Excellent diversification
The 3 months correlation between Boswell and CTA-PB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Boswell J G and E I du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E I du and Boswell J 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 Boswell J G are associated (or correlated) with E I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E I du has no effect on the direction of Boswell J i.e., Boswell J and E I go up and down completely randomly.
Pair Corralation between Boswell J and E I
Given the investment horizon of 90 days Boswell J G is expected to generate 1.16 times more return on investment than E I. However, Boswell J is 1.16 times more volatile than E I du. It trades about 0.15 of its potential returns per unit of risk. E I du is currently generating about -0.18 per unit of risk. If you would invest 55,700 in Boswell J G on August 30, 2024 and sell it today you would earn a total of 2,300 from holding Boswell J G or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boswell J G vs. E I du
Performance |
| Timeline |
| Boswell J G |
| E I du |
Boswell J and E I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boswell J and E I
The main advantage of trading using opposite Boswell J and E I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boswell J position performs unexpectedly, E I 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 E I will offset losses from the drop in E I's long position.| Boswell J vs. KS AG DRC | Boswell J vs. ICL Israel Chemicals | Boswell J vs. CF Industries Holdings | Boswell J vs. The Mosaic |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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