Correlation Between Foot Locker and Boqii Holding
Can any of the company-specific risk be diversified away by investing in both Foot Locker and Boqii Holding 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 Foot Locker and Boqii Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and Boqii Holding Limited, you can compare the effects of market volatilities on Foot Locker and Boqii Holding 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 Foot Locker with a short position of Boqii Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and Boqii Holding.
Diversification Opportunities for Foot Locker and Boqii Holding
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Foot and Boqii is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and Boqii Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding Limited and Foot Locker 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 Foot Locker are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding Limited has no effect on the direction of Foot Locker i.e., Foot Locker and Boqii Holding go up and down completely randomly.
Pair Corralation between Foot Locker and Boqii Holding
Allowing for the 90-day total investment horizon Foot Locker is expected to generate 16.36 times less return on investment than Boqii Holding. But when comparing it to its historical volatility, Foot Locker is 2.6 times less risky than Boqii Holding. It trades about 0.01 of its potential returns per unit of risk. Boqii Holding Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Boqii Holding Limited on August 23, 2024 and sell it today you would earn a total of 12.40 from holding Boqii Holding Limited or generate 31.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. Boqii Holding Limited
Performance |
| Timeline |
| Foot Locker |
| Boqii Holding Limited |
Foot Locker and Boqii Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and Boqii Holding
The main advantage of trading using opposite Foot Locker and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.| Foot Locker vs. Ross Stores | Foot Locker vs. Childrens Place | Foot Locker vs. Guess Inc | Foot Locker vs. Burlington Stores |
| Boqii Holding vs. Winmark | Boqii Holding vs. Arko Corp | Boqii Holding vs. ABIVAX Socit Anonyme | Boqii Holding vs. SCOR PK |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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