Correlation Between BW Energy and Electromagnetic Geoservices
Can any of the company-specific risk be diversified away by investing in both BW Energy and Electromagnetic Geoservices 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 Energy and Electromagnetic Geoservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Energy and Electromagnetic Geoservices ASA, you can compare the effects of market volatilities on BW Energy and Electromagnetic Geoservices 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 Energy with a short position of Electromagnetic Geoservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Energy and Electromagnetic Geoservices.
Diversification Opportunities for BW Energy and Electromagnetic Geoservices
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BWE and Electromagnetic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BW Energy and Electromagnetic Geoservices AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromagnetic Geoservices and BW Energy 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 Energy are associated (or correlated) with Electromagnetic Geoservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromagnetic Geoservices has no effect on the direction of BW Energy i.e., BW Energy and Electromagnetic Geoservices go up and down completely randomly.
Pair Corralation between BW Energy and Electromagnetic Geoservices
If you would invest (100.00) in BW Energy on September 12, 2024 and sell it today you would earn a total of 100.00 from holding BW Energy or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BW Energy vs. Electromagnetic Geoservices AS
Performance |
| Timeline |
| BW Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Electromagnetic Geoservices |
BW Energy and Electromagnetic Geoservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Energy and Electromagnetic Geoservices
The main advantage of trading using opposite BW Energy and Electromagnetic Geoservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Energy position performs unexpectedly, Electromagnetic Geoservices 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 Electromagnetic Geoservices will offset losses from the drop in Electromagnetic Geoservices' long position.The idea behind BW Energy and Electromagnetic Geoservices ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Electromagnetic Geoservices vs. Prosafe SE | Electromagnetic Geoservices vs. TGS NOPEC Geophysical | Electromagnetic Geoservices vs. SeaBird Exploration Plc | Electromagnetic Geoservices vs. BW Offshore |
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.
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