Correlation Between BW Offshore and Regions Financial
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Regions Financial 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 BW Offshore and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Regions Financial Corp, you can compare the effects of market volatilities on BW Offshore and Regions Financial 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 BW Offshore with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Regions Financial.
Diversification Opportunities for BW Offshore and Regions Financial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0RKH and Regions is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp and BW Offshore 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 BW Offshore are associated (or correlated) with Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial Corp has no effect on the direction of BW Offshore i.e., BW Offshore and Regions Financial go up and down completely randomly.
Pair Corralation between BW Offshore and Regions Financial
Assuming the 90 days trading horizon BW Offshore is expected to generate 1.34 times less return on investment than Regions Financial. In addition to that, BW Offshore is 1.17 times more volatile than Regions Financial Corp. It trades about 0.07 of its total potential returns per unit of risk. Regions Financial Corp is currently generating about 0.11 per unit of volatility. If you would invest 1,531 in Regions Financial Corp on September 14, 2024 and sell it today you would earn a total of 975.00 from holding Regions Financial Corp or generate 63.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
BW Offshore vs. Regions Financial Corp
Performance |
| Timeline |
| BW Offshore |
| Regions Financial Corp |
BW Offshore and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Regions Financial
The main advantage of trading using opposite BW Offshore and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| BW Offshore vs. Deltex Medical Group | BW Offshore vs. Orient Telecoms | BW Offshore vs. Charter Communications Cl | BW Offshore vs. Batm Advanced Communications |
| Regions Financial vs. Schroders Investment Trusts | Regions Financial vs. BW Offshore | Regions Financial vs. Lowland Investment Co | Regions Financial vs. Nordic Semiconductor ASA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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