Correlation Between Northrop Grumman and BOS Better
Can any of the company-specific risk be diversified away by investing in both Northrop Grumman and BOS Better 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 Northrop Grumman and BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northrop Grumman and BOS Better Online, you can compare the effects of market volatilities on Northrop Grumman and BOS Better 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 Northrop Grumman with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northrop Grumman and BOS Better.
Diversification Opportunities for Northrop Grumman and BOS Better
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northrop and BOS is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Northrop Grumman and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and Northrop Grumman 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 Northrop Grumman are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Northrop Grumman i.e., Northrop Grumman and BOS Better go up and down completely randomly.
Pair Corralation between Northrop Grumman and BOS Better
Considering the 90-day investment horizon Northrop Grumman is expected to under-perform the BOS Better. But the stock apears to be less risky and, when comparing its historical volatility, Northrop Grumman is 3.19 times less risky than BOS Better. The stock trades about -0.05 of its potential returns per unit of risk. The BOS Better Online is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 487.00 in BOS Better Online on September 10, 2025 and sell it today you would lose (34.00) from holding BOS Better Online or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Northrop Grumman vs. BOS Better Online
Performance |
| Timeline |
| Northrop Grumman |
| BOS Better Online |
Northrop Grumman and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northrop Grumman and BOS Better
The main advantage of trading using opposite Northrop Grumman and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northrop Grumman position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| Northrop Grumman vs. L3Harris Technologies | Northrop Grumman vs. United Rentals | Northrop Grumman vs. FedEx | Northrop Grumman vs. Canadian National Railway |
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 the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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