Correlation Between ODP Corp and Boomer Holdings
Can any of the company-specific risk be diversified away by investing in both ODP Corp and Boomer Holdings 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 ODP Corp and Boomer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ODP Corp and Boomer Holdings, you can compare the effects of market volatilities on ODP Corp and Boomer Holdings 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 ODP Corp with a short position of Boomer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODP Corp and Boomer Holdings.
Diversification Opportunities for ODP Corp and Boomer Holdings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ODP and Boomer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ODP Corp and Boomer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boomer Holdings and ODP Corp 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 ODP Corp are associated (or correlated) with Boomer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boomer Holdings has no effect on the direction of ODP Corp i.e., ODP Corp and Boomer Holdings go up and down completely randomly.
Pair Corralation between ODP Corp and Boomer Holdings
If you would invest 0.04 in Boomer Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Boomer Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
ODP Corp vs. Boomer Holdings
Performance |
| Timeline |
| ODP Corp |
| Boomer Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ODP Corp and Boomer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ODP Corp and Boomer Holdings
The main advantage of trading using opposite ODP Corp and Boomer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODP Corp position performs unexpectedly, Boomer Holdings 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 Boomer Holdings will offset losses from the drop in Boomer Holdings' long position.| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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