Correlation Between BW Offshore and Nationwide Building
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Nationwide Building 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 Nationwide Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Nationwide Building Society, you can compare the effects of market volatilities on BW Offshore and Nationwide Building 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 Nationwide Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Nationwide Building.
Diversification Opportunities for BW Offshore and Nationwide Building
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0RKH and Nationwide is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Nationwide Building Society in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Building 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 Nationwide Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Building has no effect on the direction of BW Offshore i.e., BW Offshore and Nationwide Building go up and down completely randomly.
Pair Corralation between BW Offshore and Nationwide Building
Assuming the 90 days trading horizon BW Offshore is expected to generate 9.31 times more return on investment than Nationwide Building. However, BW Offshore is 9.31 times more volatile than Nationwide Building Society. It trades about 0.02 of its potential returns per unit of risk. Nationwide Building Society is currently generating about 0.0 per unit of risk. If you would invest 3,160 in BW Offshore on November 7, 2024 and sell it today you would earn a total of 18.00 from holding BW Offshore or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Nationwide Building Society
Performance |
| Timeline |
| BW Offshore |
| Nationwide Building |
BW Offshore and Nationwide Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Nationwide Building
The main advantage of trading using opposite BW Offshore and Nationwide Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Nationwide Building 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 Nationwide Building will offset losses from the drop in Nationwide Building's long position.| BW Offshore vs. SBM Offshore NV | BW Offshore vs. AcadeMedia AB | BW Offshore vs. Extra Space Storage | BW Offshore vs. G5 Entertainment AB |
| Nationwide Building vs. Europa Metals | Nationwide Building vs. CNH Industrial NV | Nationwide Building vs. Herald Investment Trust | Nationwide Building vs. GreenX Metals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |