Correlation Between Transcontinental and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Transcontinental 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 Transcontinental and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcontinental and BW OFFSHORE LTD, you can compare the effects of market volatilities on Transcontinental 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 Transcontinental with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and BW OFFSHORE.
Diversification Opportunities for Transcontinental and BW OFFSHORE
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transcontinental and XY81 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD and Transcontinental 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 Transcontinental 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 LTD has no effect on the direction of Transcontinental i.e., Transcontinental and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Transcontinental and BW OFFSHORE
Assuming the 90 days horizon Transcontinental is expected to generate 0.58 times more return on investment than BW OFFSHORE. However, Transcontinental is 1.72 times less risky than BW OFFSHORE. It trades about -0.08 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about -0.09 per unit of risk. If you would invest 1,210 in Transcontinental on November 6, 2024 and sell it today you would lose (30.00) from holding Transcontinental or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcontinental vs. BW OFFSHORE LTD
Performance |
| Timeline |
| Transcontinental |
| BW OFFSHORE LTD |
Transcontinental and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcontinental and BW OFFSHORE
The main advantage of trading using opposite Transcontinental and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental 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.| Transcontinental vs. United Natural Foods | Transcontinental vs. Nomad Foods | Transcontinental vs. US FOODS HOLDING | Transcontinental vs. SCANSOURCE |
| BW OFFSHORE vs. AIR LIQUIDE ADR | BW OFFSHORE vs. Delta Air Lines | BW OFFSHORE vs. NORWEGIAN AIR SHUT | BW OFFSHORE vs. CHINA SOUTHN AIR H |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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