Correlation Between BW Offshore and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Abingdon Health 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 Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Abingdon Health Plc, you can compare the effects of market volatilities on BW Offshore and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Abingdon Health.
Diversification Opportunities for BW Offshore and Abingdon Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0RKH and Abingdon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of BW Offshore i.e., BW Offshore and Abingdon Health go up and down completely randomly.
Pair Corralation between BW Offshore and Abingdon Health
Assuming the 90 days trading horizon BW Offshore is expected to generate 0.93 times more return on investment than Abingdon Health. However, BW Offshore is 1.08 times less risky than Abingdon Health. It trades about 0.01 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.11 per unit of risk. If you would invest 2,776 in BW Offshore on September 15, 2024 and sell it today you would lose (18.00) from holding BW Offshore or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Abingdon Health Plc
Performance |
| Timeline |
| BW Offshore |
| Abingdon Health Plc |
BW Offshore and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Abingdon Health
The main advantage of trading using opposite BW Offshore and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| BW Offshore vs. Creo Medical Group | BW Offshore vs. Systemair AB | BW Offshore vs. Delta Air Lines | BW Offshore vs. Deltex Medical Group |
| Abingdon Health vs. Vulcan Materials Co | Abingdon Health vs. HCA Healthcare | Abingdon Health vs. Inspiration Healthcare Group | Abingdon Health vs. Optima Health plc |
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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