Correlation Between Systemair and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Systemair and BW Offshore 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 Systemair and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and BW Offshore, you can compare the effects of market volatilities on Systemair and BW Offshore 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 Systemair with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and BW Offshore.
Diversification Opportunities for Systemair and BW Offshore
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Systemair and 0RKH is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Systemair 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 Systemair AB are associated (or correlated) with BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Systemair i.e., Systemair and BW Offshore go up and down completely randomly.
Pair Corralation between Systemair and BW Offshore
Assuming the 90 days trading horizon Systemair is expected to generate 11.86 times less return on investment than BW Offshore. In addition to that, Systemair is 1.01 times more volatile than BW Offshore. It trades about 0.02 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.29 per unit of volatility. If you would invest 2,775 in BW Offshore on October 22, 2024 and sell it today you would earn a total of 300.00 from holding BW Offshore or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. BW Offshore
Performance |
| Timeline |
| Systemair AB |
| BW Offshore |
Systemair and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and BW Offshore
The main advantage of trading using opposite Systemair and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Systemair vs. Bellevue Healthcare Trust | Systemair vs. Creo Medical Group | Systemair vs. Cardinal Health | Systemair vs. Empire Metals Limited |
| BW Offshore vs. Home Depot | BW Offshore vs. Ebro Foods | BW Offshore vs. Cairn Homes PLC | BW Offshore vs. Jupiter Fund Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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