Correlation Between Boqii Holding and Murphy USA

Can any of the company-specific risk be diversified away by investing in both Boqii Holding and Murphy USA 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 Murphy USA 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 Murphy USA, you can compare the effects of market volatilities on Boqii Holding and Murphy USA 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 Murphy USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and Murphy USA.

Diversification Opportunities for Boqii Holding and Murphy USA

-0.74

Correlation Coefficient

Boqii Holding  Murphy USA

Pay attention - limited upside

The 3 months correlation between Boqii and Murphy is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Murphy USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy USA 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 Murphy USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy USA has no effect on the direction of Boqii Holding i.e., Boqii Holding and Murphy USA go up and down completely randomly.

Pair Corralation between Boqii Holding and Murphy USA

Allowing for the 90-day total investment horizon Boqii Holding is expected to generate 3.33 times less return on investment than Murphy USA. In addition to that, Boqii Holding is 11.63 times more volatile than Murphy USA. It trades about 0.0 of its total potential returns per unit of risk. Murphy USA is currently generating about 0.13 per unit of volatility. If you would invest  27,920  in Murphy USA on January 28, 2024 and sell it today you would earn a total of  14,214  from holding Murphy USA or generate 50.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Boqii Holding Limited  vs.  Murphy USA

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Murphy USA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Murphy USA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Murphy USA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boqii Holding and Murphy USA

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

The idea behind Boqii Holding Limited and Murphy USA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.