Correlation Between Albion Technology and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and BW Offshore, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and BW Offshore.
Diversification Opportunities for Albion Technology and BW Offshore
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Albion and 0RKH is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and BW Offshore go up and down completely randomly.
Pair Corralation between Albion Technology and BW Offshore
Assuming the 90 days trading horizon Albion Technology General is expected to generate 0.4 times more return on investment than BW Offshore. However, Albion Technology General is 2.48 times less risky than BW Offshore. It trades about 0.04 of its potential returns per unit of risk. BW Offshore is currently generating about -0.01 per unit of risk. If you would invest 6,543 in Albion Technology General on September 1, 2024 and sell it today you would earn a total of 307.00 from holding Albion Technology General or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. BW Offshore
Performance |
| Timeline |
| Albion Technology General |
| BW Offshore |
Albion Technology and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and BW Offshore
The main advantage of trading using opposite Albion Technology and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Reliance Industries Ltd |
| BW Offshore vs. Microchip Technology | BW Offshore vs. Cizzle Biotechnology Holdings | BW Offshore vs. Advanced Medical Solutions | BW Offshore vs. Allianz Technology Trust |
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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