Correlation Between BW Offshore and State Bank
Can any of the company-specific risk be diversified away by investing in both BW Offshore and State Bank 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 State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and State Bank of, you can compare the effects of market volatilities on BW Offshore and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and State Bank.
Diversification Opportunities for BW Offshore and State Bank
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0RKH and State is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of BW Offshore i.e., BW Offshore and State Bank go up and down completely randomly.
Pair Corralation between BW Offshore and State Bank
Assuming the 90 days trading horizon BW Offshore is expected to generate 1.17 times more return on investment than State Bank. However, BW Offshore is 1.17 times more volatile than State Bank of. It trades about 0.07 of its potential returns per unit of risk. State Bank of is currently generating about 0.07 per unit of risk. If you would invest 2,002 in BW Offshore on September 12, 2024 and sell it today you would earn a total of 751.00 from holding BW Offshore or generate 37.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.19% |
| Values | Daily Returns |
BW Offshore vs. State Bank of
Performance |
| Timeline |
| BW Offshore |
| State Bank |
BW Offshore and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and State Bank
The main advantage of trading using opposite BW Offshore and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| BW Offshore vs. Hong Kong Land | BW Offshore vs. Neometals | BW Offshore vs. Coor Service Management | BW Offshore vs. Fidelity Sustainable USD |
| State Bank vs. Cizzle Biotechnology Holdings | State Bank vs. Jupiter Fund Management | State Bank vs. Caledonia Mining | State Bank 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 Stocks Directory module to find actively traded stocks across global markets.
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