Correlation Between Boqii Holding and Betterware

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

By analyzing existing cross correlation between Boqii Holding Limited and Betterware de Mxico,, you can compare the effects of market volatilities on Boqii Holding and Betterware 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 Boqii Holding with a short position of Betterware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and Betterware.

Diversification Opportunities for Boqii Holding and Betterware

-0.75

Correlation Coefficient

Boqii Holding  Betterware

Pay attention - limited upside

The 3 months correlation between Boqii and Betterware is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Betterware de Mxico, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betterware de Mxico, and Boqii Holding 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 Boqii Holding Limited are associated (or correlated) with Betterware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betterware de Mxico, has no effect on the direction of Boqii Holding i.e., Boqii Holding and Betterware go up and down completely randomly.

Pair Corralation between Boqii Holding and Betterware

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 2.39 times more return on investment than Betterware. However, Boqii Holding is 2.39 times more volatile than Betterware de Mxico,. It trades about 0.18 of its potential returns per unit of risk. Betterware de Mxico, is currently generating about -0.06 per unit of risk. If you would invest  26.00  in Boqii Holding Limited on March 17, 2024 and sell it today you would earn a total of  27.00  from holding Boqii Holding Limited or generate 103.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Boqii Holding Limited  vs.  Betterware de Mxico,

Boqii Holding Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boqii Holding Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Boqii Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Betterware de Mxico,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Betterware de Mxico, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Boqii Holding and Betterware

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

The idea behind Boqii Holding Limited and Betterware de Mxico, 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.