Correlation Between Alexander Marine and Bonny Worldwide
Can any of the company-specific risk be diversified away by investing in both Alexander Marine and Bonny Worldwide 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 Alexander Marine and Bonny Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexander Marine Co and Bonny Worldwide, you can compare the effects of market volatilities on Alexander Marine and Bonny Worldwide 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 Alexander Marine with a short position of Bonny Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Marine and Bonny Worldwide.
Diversification Opportunities for Alexander Marine and Bonny Worldwide
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alexander and Bonny is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Marine Co and Bonny Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonny Worldwide and Alexander Marine 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 Alexander Marine Co are associated (or correlated) with Bonny Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonny Worldwide has no effect on the direction of Alexander Marine i.e., Alexander Marine and Bonny Worldwide go up and down completely randomly.
Pair Corralation between Alexander Marine and Bonny Worldwide
Assuming the 90 days trading horizon Alexander Marine Co is expected to under-perform the Bonny Worldwide. But the stock apears to be less risky and, when comparing its historical volatility, Alexander Marine Co is 1.69 times less risky than Bonny Worldwide. The stock trades about -0.09 of its potential returns per unit of risk. The Bonny Worldwide is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,280 in Bonny Worldwide on August 26, 2024 and sell it today you would earn a total of 20,570 from holding Bonny Worldwide or generate 327.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexander Marine Co vs. Bonny Worldwide
Performance |
| Timeline |
| Alexander Marine |
| Bonny Worldwide |
Alexander Marine and Bonny Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexander Marine and Bonny Worldwide
The main advantage of trading using opposite Alexander Marine and Bonny Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexander Marine position performs unexpectedly, Bonny Worldwide 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 Bonny Worldwide will offset losses from the drop in Bonny Worldwide's long position.| Alexander Marine vs. Giant Manufacturing Co | Alexander Marine vs. Johnson Health Tech | Alexander Marine vs. Sports Gear Co | Alexander Marine vs. Power Wind Health |
| Bonny Worldwide vs. Giant Manufacturing Co | Bonny Worldwide vs. Johnson Health Tech | Bonny Worldwide vs. Sports Gear Co | Bonny Worldwide vs. Power Wind Health |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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