Correlation Between Boqii Holding and Best Buy

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

Diversification Opportunities for Boqii Holding and Best Buy

-0.68

Correlation Coefficient

Boqii Holding  Best Buy

Excellent diversification

The 3 months correlation between Boqii and Best is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy 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 Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Boqii Holding i.e., Boqii Holding and Best Buy go up and down completely randomly.

Pair Corralation between Boqii Holding and Best Buy

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 12.86 times more return on investment than Best Buy. However, Boqii Holding is 12.86 times more volatile than Best Buy Co. It trades about 0.05 of its potential returns per unit of risk. Best Buy Co is currently generating about 0.0 per unit of risk. If you would invest  27.00  in Boqii Holding Limited on January 29, 2024 and sell it today you would earn a total of  3.00  from holding Boqii Holding Limited or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Boqii Holding Limited  vs.  Best Buy Co

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 weak 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.

Best Buy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental drivers, Best Buy is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boqii Holding and Best Buy

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

The idea behind Boqii Holding Limited and Best Buy Co 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 Global Correlations module to find global opportunities by holding instruments from different markets.