Correlation Between BW Offshore and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Intermediate Capital 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 Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Intermediate Capital Group, you can compare the effects of market volatilities on BW Offshore and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Intermediate Capital.
Diversification Opportunities for BW Offshore and Intermediate Capital
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0RKH and Intermediate is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of BW Offshore i.e., BW Offshore and Intermediate Capital go up and down completely randomly.
Pair Corralation between BW Offshore and Intermediate Capital
Assuming the 90 days trading horizon BW Offshore is expected to generate 1.25 times more return on investment than Intermediate Capital. However, BW Offshore is 1.25 times more volatile than Intermediate Capital Group. It trades about 0.27 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about -0.25 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Intermediate Capital Group
Performance |
| Timeline |
| BW Offshore |
| Intermediate Capital |
BW Offshore and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Intermediate Capital
The main advantage of trading using opposite BW Offshore and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital'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 |
| Intermediate Capital vs. Morgan Advanced Materials | Intermediate Capital vs. Sabre Insurance Group | Intermediate Capital vs. Target Healthcare REIT | Intermediate Capital vs. Vienna Insurance 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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