Correlation Between BW Offshore and Edita Food
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Edita Food 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 Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Edita Food Industries, you can compare the effects of market volatilities on BW Offshore and Edita Food 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 Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Edita Food.
Diversification Opportunities for BW Offshore and Edita Food
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 0RKH and Edita is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries 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 Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of BW Offshore i.e., BW Offshore and Edita Food go up and down completely randomly.
Pair Corralation between BW Offshore and Edita Food
Assuming the 90 days trading horizon BW Offshore is expected to generate 0.52 times more return on investment than Edita Food. However, BW Offshore is 1.91 times less risky than Edita Food. It trades about -0.09 of its potential returns per unit of risk. Edita Food Industries is currently generating about -0.21 per unit of risk. If you would invest 3,029 in BW Offshore on August 24, 2024 and sell it today you would lose (209.00) from holding BW Offshore or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BW Offshore vs. Edita Food Industries
Performance |
| Timeline |
| BW Offshore |
| Edita Food Industries |
BW Offshore and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Edita Food
The main advantage of trading using opposite BW Offshore and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| BW Offshore vs. Quadrise Plc | BW Offshore vs. Intuitive Investments Group | BW Offshore vs. European Metals Holdings | BW Offshore vs. Athelney Trust plc |
| Edita Food vs. Endeavour Mining Corp | Edita Food vs. Blackrock World Mining | Edita Food vs. Global Net Lease | Edita Food vs. Anglesey Mining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |