Correlation Between Bawat Water and CirChem AB
Can any of the company-specific risk be diversified away by investing in both Bawat Water and CirChem AB 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 Bawat Water and CirChem AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bawat Water Technologies and CirChem AB, you can compare the effects of market volatilities on Bawat Water and CirChem AB 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 Bawat Water with a short position of CirChem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bawat Water and CirChem AB.
Diversification Opportunities for Bawat Water and CirChem AB
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bawat and CirChem is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bawat Water Technologies and CirChem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CirChem AB and Bawat Water 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 Bawat Water Technologies are associated (or correlated) with CirChem AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CirChem AB has no effect on the direction of Bawat Water i.e., Bawat Water and CirChem AB go up and down completely randomly.
Pair Corralation between Bawat Water and CirChem AB
Assuming the 90 days trading horizon Bawat Water Technologies is expected to generate 4.23 times more return on investment than CirChem AB. However, Bawat Water is 4.23 times more volatile than CirChem AB. It trades about -0.01 of its potential returns per unit of risk. CirChem AB is currently generating about -0.05 per unit of risk. If you would invest 90.00 in Bawat Water Technologies on November 5, 2024 and sell it today you would lose (7.00) from holding Bawat Water Technologies or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bawat Water Technologies vs. CirChem AB
Performance |
| Timeline |
| Bawat Water Technologies |
| CirChem AB |
Bawat Water and CirChem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bawat Water and CirChem AB
The main advantage of trading using opposite Bawat Water and CirChem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bawat Water position performs unexpectedly, CirChem AB 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 CirChem AB will offset losses from the drop in CirChem AB's long position.| Bawat Water vs. Norion Bank | Bawat Water vs. White Pearl Technology | Bawat Water vs. Vitec Software Group | Bawat Water vs. Svenska Handelsbanken AB |
| CirChem AB vs. Munters Group AB | CirChem AB vs. Qleanair Holding AB | CirChem AB vs. Bawat Water Technologies | CirChem AB vs. Resqunit AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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