Correlation Between Boqii Holding and RH

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

Diversification Opportunities for Boqii Holding and RH

-0.32

Correlation Coefficient

Boqii Holding  RH

Very good diversification

The 3 months correlation between Boqii and RH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and RH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RH 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 RH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RH has no effect on the direction of Boqii Holding i.e., Boqii Holding and RH go up and down completely randomly.

Pair Corralation between Boqii Holding and RH

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 0.97 times more return on investment than RH. However, Boqii Holding Limited is 1.03 times less risky than RH. It trades about 0.06 of its potential returns per unit of risk. RH is currently generating about -0.09 per unit of risk. If you would invest  25.00  in Boqii Holding Limited on January 26, 2024 and sell it today you would earn a total of  1.00  from holding Boqii Holding Limited or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Boqii Holding Limited  vs.  RH

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 uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

RH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, RH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Boqii Holding and RH

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

The idea behind Boqii Holding Limited and RH 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.