Correlation Between Lands End and Boqii Holding

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

Diversification Opportunities for Lands End and Boqii Holding

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Lands and Boqii is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and Boqii Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding and Lands End 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 Lands End are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding has no effect on the direction of Lands End i.e., Lands End and Boqii Holding go up and down completely randomly.

Pair Corralation between Lands End and Boqii Holding

Allowing for the 90-day total investment horizon Lands End is expected to generate 0.63 times more return on investment than Boqii Holding. However, Lands End is 1.59 times less risky than Boqii Holding. It trades about 0.03 of its potential returns per unit of risk. Boqii Holding is currently generating about -0.05 per unit of risk. If you would invest  1,147  in Lands End on May 10, 2022 and sell it today you would earn a total of  313.00  from holding Lands End or generate 27.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy93.96%
ValuesDaily Returns

Lands End  vs.  Boqii Holding Ltd

 Performance (%) 
       Timeline  
Lands End 
Lands Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Lands End are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lands End exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lands Price Channel

Boqii Holding 
Boqii Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boqii Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Boqii Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Boqii Price Channel

Lands End and Boqii Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lands End and Boqii Holding

The main advantage of trading using opposite Lands End and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lands End position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.
The idea behind Lands End and Boqii Holding 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.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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