Correlation Between Commercial Vehicle and BOVIS HOMES

Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and BOVIS HOMES 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 Commercial Vehicle and BOVIS HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Commercial Vehicle Group and BOVIS HOMES GROUP, you can compare the effects of market volatilities on Commercial Vehicle and BOVIS HOMES 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 Commercial Vehicle with a short position of BOVIS HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and BOVIS HOMES.

Diversification Opportunities for Commercial Vehicle and BOVIS HOMES

-0.51

Correlation Coefficient

Commercial Vehicle  BOVIS HOMES

Excellent diversification

The 3 months correlation between Commercial and BOVIS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and BOVIS HOMES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOVIS HOMES GROUP and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with BOVIS HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOVIS HOMES GROUP has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and BOVIS HOMES go up and down completely randomly.

Pair Corralation between Commercial Vehicle and BOVIS HOMES

Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the BOVIS HOMES. In addition to that, Commercial Vehicle is 1.31 times more volatile than BOVIS HOMES GROUP. It trades about -0.07 of its total potential returns per unit of risk. BOVIS HOMES GROUP is currently generating about -0.01 per unit of volatility. If you would invest  888.00  in BOVIS HOMES GROUP on May 7, 2025 and sell it today you would lose (233.00) from holding BOVIS HOMES GROUP or give up 26.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Commercial Vehicle Group  vs.  BOVIS HOMES GROUP

Commercial Vehicle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Commercial Vehicle Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Commercial Vehicle unveiled solid returns over the last few months and may actually be approaching a breakup point.

BOVIS HOMES GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOVIS HOMES GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Commercial Vehicle and BOVIS HOMES

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

The idea behind Commercial Vehicle Group and BOVIS HOMES GROUP 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.