Correlation Between BOC Aviation and Bunzl Plc

Can any of the company-specific risk be diversified away by investing in both BOC Aviation and Bunzl Plc 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 BOC Aviation and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOC Aviation Limited and Bunzl plc, you can compare the effects of market volatilities on BOC Aviation and Bunzl Plc 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 BOC Aviation with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Aviation and Bunzl Plc.

Diversification Opportunities for BOC Aviation and Bunzl Plc

-0.48

Correlation Coefficient

BOC Aviation  Bunzl Plc

Very good diversification

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

Pair Corralation between BOC Aviation and Bunzl Plc

Assuming the 90 days horizon BOC Aviation Limited is expected to generate 1.19 times more return on investment than Bunzl Plc. However, BOC Aviation is 1.19 times more volatile than Bunzl plc. It trades about 0.13 of its potential returns per unit of risk. Bunzl plc is currently generating about -0.05 per unit of risk. If you would invest  730.00  in BOC Aviation Limited on May 7, 2025 and sell it today you would earn a total of  85.00  from holding BOC Aviation Limited or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

BOC Aviation Limited  vs.  Bunzl plc

BOC Aviation Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOC Aviation Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BOC Aviation may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Bunzl plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bunzl plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Bunzl Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BOC Aviation and Bunzl Plc

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

The idea behind BOC Aviation Limited and Bunzl plc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.