Correlation Between Datagroup and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Datagroup and BW Offshore 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 Datagroup and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datagroup SE and BW Offshore, you can compare the effects of market volatilities on Datagroup and BW Offshore 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 Datagroup with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datagroup and BW Offshore.
Diversification Opportunities for Datagroup and BW Offshore
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Datagroup and 0RKH is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Datagroup 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 Datagroup SE are associated (or correlated) with BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Datagroup i.e., Datagroup and BW Offshore go up and down completely randomly.
Pair Corralation between Datagroup and BW Offshore
Assuming the 90 days trading horizon Datagroup SE is expected to under-perform the BW Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Datagroup SE is 1.27 times less risky than BW Offshore. The stock trades about -0.02 of its potential returns per unit of risk. The BW Offshore is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,013 in BW Offshore on September 3, 2024 and sell it today you would earn a total of 695.00 from holding BW Offshore or generate 34.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Datagroup SE vs. BW Offshore
Performance |
| Timeline |
| Datagroup SE |
| BW Offshore |
Datagroup and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datagroup and BW Offshore
The main advantage of trading using opposite Datagroup and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datagroup position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Datagroup vs. Catalyst Media Group | Datagroup vs. CATLIN GROUP | Datagroup vs. RTW Venture Fund | Datagroup vs. Secure Property Development |
| BW Offshore vs. Catalyst Media Group | BW Offshore vs. CATLIN GROUP | BW Offshore vs. RTW Venture Fund | BW Offshore vs. Secure Property Development |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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