Correlation Between BW Offshore and Scancell Hldgs
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Scancell Hldgs 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 Scancell Hldgs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore and Scancell Hldgs Plc, you can compare the effects of market volatilities on BW Offshore and Scancell Hldgs 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 Scancell Hldgs. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Scancell Hldgs.
Diversification Opportunities for BW Offshore and Scancell Hldgs
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0RKH and Scancell is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore and Scancell Hldgs Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scancell Hldgs Plc 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 Scancell Hldgs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scancell Hldgs Plc has no effect on the direction of BW Offshore i.e., BW Offshore and Scancell Hldgs go up and down completely randomly.
Pair Corralation between BW Offshore and Scancell Hldgs
Assuming the 90 days trading horizon BW Offshore is expected to generate 0.48 times more return on investment than Scancell Hldgs. However, BW Offshore is 2.09 times less risky than Scancell Hldgs. It trades about 0.02 of its potential returns per unit of risk. Scancell Hldgs Plc is currently generating about -0.3 per unit of risk. If you would invest 2,731 in BW Offshore on September 21, 2024 and sell it today you would earn a total of 12.00 from holding BW Offshore or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore vs. Scancell Hldgs Plc
Performance |
| Timeline |
| BW Offshore |
| Scancell Hldgs Plc |
BW Offshore and Scancell Hldgs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Scancell Hldgs
The main advantage of trading using opposite BW Offshore and Scancell Hldgs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Scancell Hldgs 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 Scancell Hldgs will offset losses from the drop in Scancell Hldgs' long position.| BW Offshore vs. Samsung Electronics Co | BW Offshore vs. Samsung Electronics Co | BW Offshore vs. Hyundai Motor | BW Offshore vs. Reliance Industries Ltd |
| Scancell Hldgs vs. Evolution Gaming Group | Scancell Hldgs vs. BW Offshore | Scancell Hldgs vs. Accsys Technologies PLC | Scancell Hldgs vs. Hochschild Mining plc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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