Correlation Between BW Offshore and Allergan Plc
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Allergan Plc 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 Offshore and Allergan Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore Limited and Allergan Plc, you can compare the effects of market volatilities on BW Offshore and Allergan Plc 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 Offshore with a short position of Allergan Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Allergan Plc.
Diversification Opportunities for BW Offshore and Allergan Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BWOFY and Allergan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and Allergan Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allergan Plc and BW Offshore 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 Offshore Limited are associated (or correlated) with Allergan Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allergan Plc has no effect on the direction of BW Offshore i.e., BW Offshore and Allergan Plc go up and down completely randomly.
Pair Corralation between BW Offshore and Allergan Plc
If you would invest 459.00 in BW Offshore Limited on September 12, 2024 and sell it today you would earn a total of 96.00 from holding BW Offshore Limited or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BW Offshore Limited vs. Allergan Plc
Performance |
| Timeline |
| BW Offshore Limited |
| Allergan Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BW Offshore and Allergan Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Allergan Plc
The main advantage of trading using opposite BW Offshore and Allergan Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Allergan Plc 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 Allergan Plc will offset losses from the drop in Allergan Plc's long position.| BW Offshore vs. Legacy Education | BW Offshore vs. Apple Inc | BW Offshore vs. NVIDIA | BW Offshore vs. Microsoft |
| Allergan Plc vs. Kura Sushi USA | Allergan Plc vs. Awilco Drilling PLC | Allergan Plc vs. Shake Shack | Allergan Plc vs. Boyd Gaming |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |