Correlation Between BW Offshore and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Ashtead Technology 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 Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Ashtead Technology Holdings, you can compare the effects of market volatilities on BW Offshore and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Ashtead Technology.
Diversification Opportunities for BW Offshore and Ashtead Technology
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0RKH and Ashtead is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of BW Offshore i.e., BW Offshore and Ashtead Technology go up and down completely randomly.
Pair Corralation between BW Offshore and Ashtead Technology
Assuming the 90 days trading horizon BW Offshore is expected to generate 0.81 times more return on investment than Ashtead Technology. However, BW Offshore is 1.23 times less risky than Ashtead Technology. It trades about 0.27 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.08 per unit of risk. If you would invest 2,745 in BW Offshore on October 10, 2024 and sell it today you would earn a total of 300.00 from holding BW Offshore or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Ashtead Technology Holdings
Performance |
| Timeline |
| BW Offshore |
| Ashtead Technology |
BW Offshore and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Ashtead Technology
The main advantage of trading using opposite BW Offshore and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| BW Offshore vs. Oxford Technology 2 | BW Offshore vs. Zoom Video Communications | BW Offshore vs. International Biotechnology Trust | BW Offshore vs. Infrastrutture Wireless Italiane |
| Ashtead Technology vs. Cornish Metals | Ashtead Technology vs. Sovereign Metals | Ashtead Technology vs. Axway Software SA | Ashtead Technology vs. Spirent Communications 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |