Correlation Between Deneb Investments and Boxer Retail
Can any of the company-specific risk be diversified away by investing in both Deneb Investments and Boxer Retail 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 Deneb Investments and Boxer Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deneb Investments and Boxer Retail, you can compare the effects of market volatilities on Deneb Investments and Boxer Retail 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 Deneb Investments with a short position of Boxer Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deneb Investments and Boxer Retail.
Diversification Opportunities for Deneb Investments and Boxer Retail
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deneb and Boxer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Deneb Investments and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail and Deneb Investments 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 Deneb Investments are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of Deneb Investments i.e., Deneb Investments and Boxer Retail go up and down completely randomly.
Pair Corralation between Deneb Investments and Boxer Retail
Assuming the 90 days trading horizon Deneb Investments is expected to generate 1.21 times more return on investment than Boxer Retail. However, Deneb Investments is 1.21 times more volatile than Boxer Retail. It trades about 0.19 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.03 per unit of risk. If you would invest 20,200 in Deneb Investments on November 4, 2024 and sell it today you would earn a total of 1,800 from holding Deneb Investments or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Deneb Investments vs. Boxer Retail
Performance |
| Timeline |
| Deneb Investments |
| Boxer Retail |
Deneb Investments and Boxer Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deneb Investments and Boxer Retail
The main advantage of trading using opposite Deneb Investments and Boxer Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deneb Investments position performs unexpectedly, Boxer Retail 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 Boxer Retail will offset losses from the drop in Boxer Retail's long position.| Deneb Investments vs. Trematon Capital Investments | Deneb Investments vs. Brimstone Investment | Deneb Investments vs. Reinet Investments SCA | Deneb Investments vs. Kap Industrial Holdings |
| Boxer Retail vs. British American Tobacco | Boxer Retail vs. Astral Foods | Boxer Retail vs. We Buy Cars | Boxer Retail vs. Harmony Gold Mining |
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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