Correlation Between Boqii Holding and Aarons Holdings

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Can any of the company-specific risk be diversified away by investing in both Boqii Holding and Aarons Holdings 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 Aarons Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boqii Holding and Aarons Holdings, you can compare the effects of market volatilities on Boqii Holding and Aarons Holdings 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 Aarons Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and Aarons Holdings.

Diversification Opportunities for Boqii Holding and Aarons Holdings

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Boqii and Aarons is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Ltd and Aarons Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons Holdings 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 are associated (or correlated) with Aarons Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons Holdings has no effect on the direction of Boqii Holding i.e., Boqii Holding and Aarons Holdings go up and down completely randomly.

Pair Corralation between Boqii Holding and Aarons Holdings

Allowing for the 90-day total investment horizon Boqii Holding is expected to generate 2.87 times more return on investment than Aarons Holdings. However, Boqii Holding is 2.87 times more volatile than Aarons Holdings. It trades about -0.03 of its potential returns per unit of risk. Aarons Holdings is currently generating about -0.13 per unit of risk. If you would invest  195.00  in Boqii Holding on June 29, 2022 and sell it today you would lose (76.00)  from holding Boqii Holding or give up 38.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Boqii Holding Ltd  vs.  Aarons Holdings

 Performance (%) 
       Timeline  
Boqii Holding 
Boqii Performance
0 of 100
Over the last 90 days Boqii Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Boqii Price Channel

Aarons Holdings 
Aarons Performance
0 of 100
Over the last 90 days Aarons Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in October 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aarons Price Channel

Boqii Holding and Aarons Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boqii Holding and Aarons Holdings

The main advantage of trading using opposite Boqii Holding and Aarons Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boqii Holding position performs unexpectedly, Aarons Holdings 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 Aarons Holdings will offset losses from the drop in Aarons Holdings' long position.
Boqii Holding vs. Clearwater Paper Corp
The idea behind Boqii Holding and Aarons Holdings 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.
Aarons Holdings vs. Clearwater Paper Corp
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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