Correlation Between John B and BOS Better
Can any of the company-specific risk be diversified away by investing in both John B and BOS Better 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 BOS Better 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 BOS Better Online, you can compare the effects of market volatilities on John B and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and BOS Better.
Diversification Opportunities for John B and BOS Better
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and BOS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of John B i.e., John B and BOS Better go up and down completely randomly.
Pair Corralation between John B and BOS Better
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the BOS Better. But the stock apears to be less risky and, when comparing its historical volatility, John B Sanfilippo is 1.3 times less risky than BOS Better. The stock trades about -0.05 of its potential returns per unit of risk. The BOS Better Online is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 300.00 in BOS Better Online on October 26, 2024 and sell it today you would earn a total of 77.00 from holding BOS Better Online or generate 25.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. BOS Better Online
Performance |
| Timeline |
| John B Sanfilippo |
| BOS Better Online |
John B and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and BOS Better
The main advantage of trading using opposite John B and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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