Correlation Between Bourque Indts and Reckitt Benckiser

Can any of the company-specific risk be diversified away by investing in both Bourque Indts and Reckitt Benckiser 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 Bourque Indts and Reckitt Benckiser into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bourque Indts and Reckitt Benckiser Group, you can compare the effects of market volatilities on Bourque Indts and Reckitt Benckiser 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 Bourque Indts with a short position of Reckitt Benckiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bourque Indts and Reckitt Benckiser.

Diversification Opportunities for Bourque Indts and Reckitt Benckiser

0.0

Correlation Coefficient

Bourque Indts  Reckitt Benckiser

Pay attention - limited upside

The 3 months correlation between Bourque and Reckitt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bourque Indts and Reckitt Benckiser Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reckitt Benckiser and Bourque Indts 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 Bourque Indts are associated (or correlated) with Reckitt Benckiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reckitt Benckiser has no effect on the direction of Bourque Indts i.e., Bourque Indts and Reckitt Benckiser go up and down completely randomly.

Pair Corralation between Bourque Indts and Reckitt Benckiser

If you would invest  5,192  in Reckitt Benckiser Group on March 4, 2024 and sell it today you would earn a total of  397.00  from holding Reckitt Benckiser Group or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bourque Indts  vs.  Reckitt Benckiser Group

Bourque Indts

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Bourque Indts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bourque Indts is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Reckitt Benckiser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reckitt Benckiser Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Bourque Indts and Reckitt Benckiser

The main advantage of trading using opposite Bourque Indts and Reckitt Benckiser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bourque Indts position performs unexpectedly, Reckitt Benckiser 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 Reckitt Benckiser will offset losses from the drop in Reckitt Benckiser's long position.

The idea behind Bourque Indts and Reckitt Benckiser Group 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.