Correlation Between Bowhead Specialty and ESGL Holdings
Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty and ESGL Holdings 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 Bowhead Specialty and ESGL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowhead Specialty Holdings and ESGL Holdings Limited, you can compare the effects of market volatilities on Bowhead Specialty and ESGL Holdings 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 Bowhead Specialty with a short position of ESGL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and ESGL Holdings.
Diversification Opportunities for Bowhead Specialty and ESGL Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bowhead and ESGL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and ESGL Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGL Holdings Limited and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with ESGL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGL Holdings Limited has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and ESGL Holdings go up and down completely randomly.
Pair Corralation between Bowhead Specialty and ESGL Holdings
Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.21 times more return on investment than ESGL Holdings. However, Bowhead Specialty Holdings is 4.75 times less risky than ESGL Holdings. It trades about -0.38 of its potential returns per unit of risk. ESGL Holdings Limited is currently generating about -0.19 per unit of risk. If you would invest 3,630 in Bowhead Specialty Holdings on October 16, 2024 and sell it today you would lose (460.00) from holding Bowhead Specialty Holdings or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.42% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. ESGL Holdings Limited
Performance |
| Timeline |
| Bowhead Specialty |
| ESGL Holdings Limited |
Bowhead Specialty and ESGL Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and ESGL Holdings
The main advantage of trading using opposite Bowhead Specialty and ESGL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty position performs unexpectedly, ESGL Holdings 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 ESGL Holdings will offset losses from the drop in ESGL Holdings' long position.| Bowhead Specialty vs. Forsys Metals Corp | Bowhead Specialty vs. ioneer Ltd American | Bowhead Specialty vs. Harmony Gold Mining | Bowhead Specialty vs. Schweiter Technologies AG |
| ESGL Holdings vs. Hurco Companies | ESGL Holdings vs. Allegion PLC | ESGL Holdings vs. Proficient Auto Logistics, | ESGL Holdings vs. Bowhead Specialty Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |