Correlation Between BROADWIND ENRGY and Oversea-Chinese BankingLimited
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and Oversea-Chinese BankingLimited 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 BROADWIND ENRGY and Oversea-Chinese BankingLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Oversea Chinese Banking, you can compare the effects of market volatilities on BROADWIND ENRGY and Oversea-Chinese BankingLimited 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 BROADWIND ENRGY with a short position of Oversea-Chinese BankingLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Oversea-Chinese BankingLimited.
Diversification Opportunities for BROADWIND ENRGY and Oversea-Chinese BankingLimited
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BROADWIND and Oversea-Chinese is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and Oversea Chinese Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oversea-Chinese BankingLimited and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with Oversea-Chinese BankingLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oversea-Chinese BankingLimited has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and Oversea-Chinese BankingLimited go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Oversea-Chinese BankingLimited
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the Oversea-Chinese BankingLimited. In addition to that, BROADWIND ENRGY is 3.5 times more volatile than Oversea Chinese Banking. It trades about -0.02 of its total potential returns per unit of risk. Oversea Chinese Banking is currently generating about 0.08 per unit of volatility. If you would invest 728.00 in Oversea Chinese Banking on October 13, 2024 and sell it today you would earn a total of 485.00 from holding Oversea Chinese Banking or generate 66.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Oversea Chinese Banking
Performance |
| Timeline |
| BROADWIND ENRGY |
| Oversea-Chinese BankingLimited |
BROADWIND ENRGY and Oversea-Chinese BankingLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Oversea-Chinese BankingLimited
The main advantage of trading using opposite BROADWIND ENRGY and Oversea-Chinese BankingLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, Oversea-Chinese BankingLimited 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 Oversea-Chinese BankingLimited will offset losses from the drop in Oversea-Chinese BankingLimited's long position.| BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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