Correlation Between Babcock Wilcox and Xometry
Can any of the company-specific risk be diversified away by investing in both Babcock Wilcox and Xometry 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 Xometry 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 Xometry, you can compare the effects of market volatilities on Babcock Wilcox and Xometry 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 Xometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babcock Wilcox and Xometry.
Diversification Opportunities for Babcock Wilcox and Xometry
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Babcock and Xometry is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Babcock Wilcox Enterprises and Xometry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xometry 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 Xometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xometry has no effect on the direction of Babcock Wilcox i.e., Babcock Wilcox and Xometry go up and down completely randomly.
Pair Corralation between Babcock Wilcox and Xometry
Allowing for the 90-day total investment horizon Babcock Wilcox Enterprises is expected to under-perform the Xometry. But the stock apears to be less risky and, when comparing its historical volatility, Babcock Wilcox Enterprises is 1.34 times less risky than Xometry. The stock trades about -0.17 of its potential returns per unit of risk. The Xometry is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 3,673 in Xometry on October 15, 2024 and sell it today you would lose (319.00) from holding Xometry or give up 8.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Babcock Wilcox Enterprises vs. Xometry
Performance |
| Timeline |
| Babcock Wilcox Enter |
| Xometry |
Babcock Wilcox and Xometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babcock Wilcox and Xometry
The main advantage of trading using opposite Babcock Wilcox and Xometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babcock Wilcox position performs unexpectedly, Xometry 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 Xometry will offset losses from the drop in Xometry'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 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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