Correlation Between BW Offshore and Gaztransport
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Gaztransport 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 Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Gaztransport et Technigaz, you can compare the effects of market volatilities on BW Offshore and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Gaztransport.
Diversification Opportunities for BW Offshore and Gaztransport
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 0RKH and Gaztransport is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of BW Offshore i.e., BW Offshore and Gaztransport go up and down completely randomly.
Pair Corralation between BW Offshore and Gaztransport
Assuming the 90 days trading horizon BW Offshore is expected to generate 1.64 times less return on investment than Gaztransport. In addition to that, BW Offshore is 1.28 times more volatile than Gaztransport et Technigaz. It trades about 0.04 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.08 per unit of volatility. If you would invest 9,045 in Gaztransport et Technigaz on August 31, 2024 and sell it today you would earn a total of 4,745 from holding Gaztransport et Technigaz or generate 52.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.15% |
| Values | Daily Returns |
BW Offshore vs. Gaztransport et Technigaz
Performance |
| Timeline |
| BW Offshore |
| Gaztransport et Technigaz |
BW Offshore and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Gaztransport
The main advantage of trading using opposite BW Offshore and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| BW Offshore vs. Fresenius Medical Care | BW Offshore vs. Charter Communications Cl | BW Offshore vs. Jupiter Fund Management | BW Offshore vs. Zoom Video Communications |
| Gaztransport vs. Neometals | Gaztransport vs. Coor Service Management | Gaztransport vs. Aeorema Communications Plc | Gaztransport vs. JLEN Environmental Assets |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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