Correlation Between BW Offshore and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Griffin Mining 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 Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Griffin Mining, you can compare the effects of market volatilities on BW Offshore and Griffin Mining 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 Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Griffin Mining.
Diversification Opportunities for BW Offshore and Griffin Mining
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0RKH and Griffin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining 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 Griffin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin Mining has no effect on the direction of BW Offshore i.e., BW Offshore and Griffin Mining go up and down completely randomly.
Pair Corralation between BW Offshore and Griffin Mining
Assuming the 90 days trading horizon BW Offshore is expected to generate 0.82 times more return on investment than Griffin Mining. However, BW Offshore is 1.22 times less risky than Griffin Mining. It trades about 0.04 of its potential returns per unit of risk. Griffin Mining is currently generating about -0.07 per unit of risk. If you would invest 2,636 in BW Offshore on September 19, 2024 and sell it today you would earn a total of 34.00 from holding BW Offshore or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Griffin Mining
Performance |
| Timeline |
| BW Offshore |
| Griffin Mining |
BW Offshore and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Griffin Mining
The main advantage of trading using opposite BW Offshore and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Griffin Mining 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 Griffin Mining will offset losses from the drop in Griffin Mining's long position.| BW Offshore vs. Odfjell Drilling | BW Offshore vs. Aberdeen Diversified Income | BW Offshore vs. Gaztransport et Technigaz | BW Offshore vs. JD Sports Fashion |
| Griffin Mining vs. Systemair AB | Griffin Mining vs. Trainline Plc | Griffin Mining vs. Compagnie Plastic Omnium | Griffin Mining vs. BW Offshore |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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