Correlation Between Babcock Wilcox and Freightos Limited
Can any of the company-specific risk be diversified away by investing in both Babcock Wilcox and Freightos Limited 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 Babcock Wilcox and Freightos Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Babcock Wilcox Enterprises and Freightos Limited Warrants, you can compare the effects of market volatilities on Babcock Wilcox and Freightos Limited 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 Babcock Wilcox with a short position of Freightos Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babcock Wilcox and Freightos Limited.
Diversification Opportunities for Babcock Wilcox and Freightos Limited
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Babcock and Freightos is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Babcock Wilcox Enterprises and Freightos Limited Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited and Babcock Wilcox 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 Babcock Wilcox Enterprises are associated (or correlated) with Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of Babcock Wilcox i.e., Babcock Wilcox and Freightos Limited go up and down completely randomly.
Pair Corralation between Babcock Wilcox and Freightos Limited
Allowing for the 90-day total investment horizon Babcock Wilcox Enterprises is expected to under-perform the Freightos Limited. But the stock apears to be less risky and, when comparing its historical volatility, Babcock Wilcox Enterprises is 2.56 times less risky than Freightos Limited. The stock trades about -0.14 of its potential returns per unit of risk. The Freightos Limited Warrants is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 6.50 in Freightos Limited Warrants on August 27, 2024 and sell it today you would earn a total of 8.50 from holding Freightos Limited Warrants or generate 130.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
Babcock Wilcox Enterprises vs. Freightos Limited Warrants
Performance |
| Timeline |
| Babcock Wilcox Enter |
| Freightos Limited |
Babcock Wilcox and Freightos Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babcock Wilcox and Freightos Limited
The main advantage of trading using opposite Babcock Wilcox and Freightos Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babcock Wilcox position performs unexpectedly, Freightos Limited 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 Freightos Limited will offset losses from the drop in Freightos Limited's long position.| Babcock Wilcox vs. Barnes Group | Babcock Wilcox vs. Crane Company | Babcock Wilcox vs. Hillenbrand | Babcock Wilcox vs. Ingersoll Rand |
| Freightos Limited vs. NH Foods Ltd | Freightos Limited vs. Albertsons Companies | Freightos Limited vs. JBG SMITH Properties | Freightos Limited vs. SunOpta |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |