Correlation Between BW LPG and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both BW LPG and LIFENET INSURANCE 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 BW LPG and LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW LPG Limited and LIFENET INSURANCE CO, you can compare the effects of market volatilities on BW LPG and LIFENET INSURANCE 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 BW LPG with a short position of LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW LPG and LIFENET INSURANCE.
Diversification Opportunities for BW LPG and LIFENET INSURANCE
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BW9 and LIFENET is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BW LPG Limited and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE and BW LPG 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 BW LPG Limited are associated (or correlated) with LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of BW LPG i.e., BW LPG and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between BW LPG and LIFENET INSURANCE
Assuming the 90 days horizon BW LPG Limited is expected to under-perform the LIFENET INSURANCE. In addition to that, BW LPG is 1.48 times more volatile than LIFENET INSURANCE CO. It trades about -0.02 of its total potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.1 per unit of volatility. If you would invest 1,180 in LIFENET INSURANCE CO on September 1, 2024 and sell it today you would earn a total of 50.00 from holding LIFENET INSURANCE CO or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW LPG Limited vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| BW LPG Limited |
| LIFENET INSURANCE |
BW LPG and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW LPG and LIFENET INSURANCE
The main advantage of trading using opposite BW LPG and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW LPG position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| BW LPG vs. Singapore Telecommunications Limited | BW LPG vs. Internet Thailand PCL | BW LPG vs. KRISPY KREME DL 01 | BW LPG vs. REGAL ASIAN INVESTMENTS |
| LIFENET INSURANCE vs. Fukuyama Transporting Co | LIFENET INSURANCE vs. Sporttotal AG | LIFENET INSURANCE vs. COLUMBIA SPORTSWEAR | LIFENET INSURANCE vs. ADRIATIC METALS LS 013355 |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |