Correlation Between BW Offshore and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Dalata Hotel 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 Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Dalata Hotel Group, you can compare the effects of market volatilities on BW Offshore and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Dalata Hotel.
Diversification Opportunities for BW Offshore and Dalata Hotel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0RKH and Dalata is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of BW Offshore i.e., BW Offshore and Dalata Hotel go up and down completely randomly.
Pair Corralation between BW Offshore and Dalata Hotel
Assuming the 90 days trading horizon BW Offshore is expected to generate 1.75 times more return on investment than Dalata Hotel. However, BW Offshore is 1.75 times more volatile than Dalata Hotel Group. It trades about 0.32 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.19 per unit of risk. If you would invest 2,733 in BW Offshore on October 19, 2024 and sell it today you would earn a total of 357.00 from holding BW Offshore or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Dalata Hotel Group
Performance |
| Timeline |
| BW Offshore |
| Dalata Hotel Group |
BW Offshore and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Dalata Hotel
The main advantage of trading using opposite BW Offshore and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| BW Offshore vs. AMG Advanced Metallurgical | BW Offshore vs. Panther Metals PLC | BW Offshore vs. Blackrock World Mining | BW Offshore vs. Cornish Metals |
| Dalata Hotel vs. Tyson Foods Cl | Dalata Hotel vs. BW Offshore | Dalata Hotel vs. EVS Broadcast Equipment | Dalata Hotel vs. Bell Food Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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