Correlation Between NFT and Booz Allen
Can any of the company-specific risk be diversified away by investing in both NFT and Booz Allen 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 NFT and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NFT Limited and Booz Allen Hamilton, you can compare the effects of market volatilities on NFT and Booz Allen 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 NFT with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFT and Booz Allen.
Diversification Opportunities for NFT and Booz Allen
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NFT and Booz is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NFT Limited and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and NFT 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 NFT Limited are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of NFT i.e., NFT and Booz Allen go up and down completely randomly.
Pair Corralation between NFT and Booz Allen
Allowing for the 90-day total investment horizon NFT Limited is expected to under-perform the Booz Allen. In addition to that, NFT is 3.45 times more volatile than Booz Allen Hamilton. It trades about -0.08 of its total potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.28 per unit of volatility. If you would invest 13,543 in Booz Allen Hamilton on November 18, 2024 and sell it today you would lose (1,770) from holding Booz Allen Hamilton or give up 13.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFT Limited vs. Booz Allen Hamilton
Performance |
| Timeline |
| NFT Limited |
| Booz Allen Hamilton |
NFT and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFT and Booz Allen
The main advantage of trading using opposite NFT and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFT position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.The idea behind NFT Limited and Booz Allen Hamilton pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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