Correlation Between BROADWIND ENRGY and TOTAL GABON
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and TOTAL GABON 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 TOTAL GABON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and TOTAL GABON, you can compare the effects of market volatilities on BROADWIND ENRGY and TOTAL GABON 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 TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and TOTAL GABON.
Diversification Opportunities for BROADWIND ENRGY and TOTAL GABON
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between BROADWIND and TOTAL is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON 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 TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and TOTAL GABON go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and TOTAL GABON
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to generate 3.44 times more return on investment than TOTAL GABON. However, BROADWIND ENRGY is 3.44 times more volatile than TOTAL GABON. It trades about 0.03 of its potential returns per unit of risk. TOTAL GABON is currently generating about 0.06 per unit of risk. If you would invest 170.00 in BROADWIND ENRGY on September 4, 2024 and sell it today you would earn a total of 18.00 from holding BROADWIND ENRGY or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. TOTAL GABON
Performance |
| Timeline |
| BROADWIND ENRGY |
| TOTAL GABON |
BROADWIND ENRGY and TOTAL GABON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and TOTAL GABON
The main advantage of trading using opposite BROADWIND ENRGY and TOTAL GABON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, TOTAL GABON 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 TOTAL GABON will offset losses from the drop in TOTAL GABON's long position.| BROADWIND ENRGY vs. TOTAL GABON | BROADWIND ENRGY vs. Walgreens Boots Alliance | BROADWIND ENRGY vs. Peak Resources Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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