Correlation Between Yara International and Boswell J
Can any of the company-specific risk be diversified away by investing in both Yara International and Boswell J 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 Yara International and Boswell J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Boswell J G, you can compare the effects of market volatilities on Yara International and Boswell J 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 Yara International with a short position of Boswell J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Boswell J.
Diversification Opportunities for Yara International and Boswell J
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yara and Boswell is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and Boswell J G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boswell J G and Yara International 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 Yara International ASA are associated (or correlated) with Boswell J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boswell J G has no effect on the direction of Yara International i.e., Yara International and Boswell J go up and down completely randomly.
Pair Corralation between Yara International and Boswell J
Assuming the 90 days horizon Yara International ASA is expected to under-perform the Boswell J. In addition to that, Yara International is 1.15 times more volatile than Boswell J G. It trades about -0.21 of its total potential returns per unit of risk. Boswell J G is currently generating about 0.06 per unit of volatility. If you would invest 57,000 in Boswell J G on September 1, 2024 and sell it today you would earn a total of 800.00 from holding Boswell J G or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Boswell J G
Performance |
| Timeline |
| Yara International ASA |
| Boswell J G |
Yara International and Boswell J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Boswell J
The main advantage of trading using opposite Yara International and Boswell J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, Boswell J 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 Boswell J will offset losses from the drop in Boswell J's long position.| Yara International vs. Nutrien | Yara International vs. Origin Agritech | Yara International vs. American Vanguard | Yara International vs. Scotts Miracle Gro |
| Boswell J vs. Corteva | Boswell J vs. Nutrien | Boswell J vs. CF Industries Holdings | Boswell J vs. Yara International ASA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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