Correlation Between Babcock Wilcox and Wilhelmina
Can any of the company-specific risk be diversified away by investing in both Babcock Wilcox and Wilhelmina 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 Wilhelmina 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 Wilhelmina, you can compare the effects of market volatilities on Babcock Wilcox and Wilhelmina 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 Wilhelmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babcock Wilcox and Wilhelmina.
Diversification Opportunities for Babcock Wilcox and Wilhelmina
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Babcock and Wilhelmina is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Babcock Wilcox Enterprises and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina 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 Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Babcock Wilcox i.e., Babcock Wilcox and Wilhelmina go up and down completely randomly.
Pair Corralation between Babcock Wilcox and Wilhelmina
Allowing for the 90-day total investment horizon Babcock Wilcox Enterprises is expected to under-perform the Wilhelmina. In addition to that, Babcock Wilcox is 2.51 times more volatile than Wilhelmina. It trades about -0.1 of its total potential returns per unit of risk. Wilhelmina is currently generating about 0.28 per unit of volatility. If you would invest 335.00 in Wilhelmina on August 30, 2024 and sell it today you would earn a total of 64.00 from holding Wilhelmina or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Babcock Wilcox Enterprises vs. Wilhelmina
Performance |
| Timeline |
| Babcock Wilcox Enter |
| Wilhelmina |
Babcock Wilcox and Wilhelmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babcock Wilcox and Wilhelmina
The main advantage of trading using opposite Babcock Wilcox and Wilhelmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babcock Wilcox position performs unexpectedly, Wilhelmina 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 Wilhelmina will offset losses from the drop in Wilhelmina's long position.| Babcock Wilcox vs. Enerpac Tool Group | Babcock Wilcox vs. Gorman Rupp | Babcock Wilcox vs. Crane Company | Babcock Wilcox vs. Franklin Electric Co |
| Wilhelmina vs. Performant Financial | Wilhelmina vs. Network 1 Technologies | Wilhelmina vs. Rentokil Initial PLC | Wilhelmina vs. Mader Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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