Correlation Between BW LPG and SITC International
Can any of the company-specific risk be diversified away by investing in both BW LPG and SITC International 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 SITC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW LPG and SITC International Holdings, you can compare the effects of market volatilities on BW LPG and SITC International 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 SITC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW LPG and SITC International.
Diversification Opportunities for BW LPG and SITC International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BWLLY and SITC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BW LPG and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC International 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 are associated (or correlated) with SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of BW LPG i.e., BW LPG and SITC International go up and down completely randomly.
Pair Corralation between BW LPG and SITC International
Assuming the 90 days horizon BW LPG is expected to generate 2.78 times more return on investment than SITC International. However, BW LPG is 2.78 times more volatile than SITC International Holdings. It trades about 0.07 of its potential returns per unit of risk. SITC International Holdings is currently generating about 0.04 per unit of risk. If you would invest 868.00 in BW LPG on September 2, 2024 and sell it today you would earn a total of 686.00 from holding BW LPG or generate 79.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.23% |
| Values | Daily Returns |
BW LPG vs. SITC International Holdings
Performance |
| Timeline |
| BW LPG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SITC International |
BW LPG and SITC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW LPG and SITC International
The main advantage of trading using opposite BW LPG and SITC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW LPG position performs unexpectedly, SITC International 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 SITC International will offset losses from the drop in SITC International's long position.| BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. Pacific Basin Shipping | BW LPG vs. Hapag Lloyd Aktiengesellschaft | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
| SITC International vs. Nippon Yusen Kabushiki | SITC International vs. AP Moeller | SITC International vs. Orient Overseas Limited | SITC International vs. Western Bulk Chartering |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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