Correlation Between John B and Boston Omaha
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Boston Omaha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Boston Omaha Corp, you can compare the effects of market volatilities on John B 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 John B with a short position of Boston Omaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Boston Omaha.
Diversification Opportunities for John B and Boston Omaha
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Boston is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo 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 John B 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 John B Sanfilippo 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 John B i.e., John B and Boston Omaha go up and down completely randomly.
Pair Corralation between John B and Boston Omaha
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Boston Omaha. In addition to that, John B is 1.07 times more volatile than Boston Omaha Corp. It trades about -0.05 of its total potential returns per unit of risk. Boston Omaha Corp is currently generating about 0.01 per unit of volatility. If you would invest 1,444 in Boston Omaha Corp on October 26, 2024 and sell it today you would earn a total of 19.00 from holding Boston Omaha Corp or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
John B Sanfilippo vs. Boston Omaha Corp
Performance |
| Timeline |
| John B Sanfilippo |
| Boston Omaha Corp |
John B and Boston Omaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and Boston Omaha
The main advantage of trading using opposite John B and Boston Omaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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.| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. J J Snack |
| Boston Omaha vs. Integral Ad Science | Boston Omaha vs. Cardlytics | Boston Omaha vs. Cimpress NV | Boston Omaha vs. QuinStreet |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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