Correlation Between HE Equipment and Boston Omaha
Can any of the company-specific risk be diversified away by investing in both HE Equipment and Boston Omaha 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 HE Equipment and Boston Omaha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Boston Omaha Corp, you can compare the effects of market volatilities on HE Equipment and Boston Omaha 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 HE Equipment with a short position of Boston Omaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Boston Omaha.
Diversification Opportunities for HE Equipment and Boston Omaha
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HEES and Boston is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp and HE Equipment 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 HE Equipment Services are associated (or correlated) with Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of HE Equipment i.e., HE Equipment and Boston Omaha go up and down completely randomly.
Pair Corralation between HE Equipment and Boston Omaha
Given the investment horizon of 90 days HE Equipment Services is expected to generate 1.36 times more return on investment than Boston Omaha. However, HE Equipment is 1.36 times more volatile than Boston Omaha Corp. It trades about 0.04 of its potential returns per unit of risk. Boston Omaha Corp is currently generating about 0.01 per unit of risk. If you would invest 4,471 in HE Equipment Services on September 14, 2024 and sell it today you would earn a total of 1,095 from holding HE Equipment Services or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Boston Omaha Corp
Performance |
| Timeline |
| HE Equipment Services |
| Boston Omaha Corp |
HE Equipment and Boston Omaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Boston Omaha
The main advantage of trading using opposite HE Equipment and Boston Omaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Boston Omaha 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 Boston Omaha will offset losses from the drop in Boston Omaha's long position.| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Herc Holdings | HE Equipment vs. Alta Equipment Group |
| Boston Omaha vs. Mirriad Advertising plc | Boston Omaha vs. INEO Tech Corp | Boston Omaha vs. Kidoz Inc | Boston Omaha vs. Marchex |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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