Correlation Between BW Offshore and PhenomeX
Can any of the company-specific risk be diversified away by investing in both BW Offshore and PhenomeX 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 PhenomeX 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 PhenomeX, you can compare the effects of market volatilities on BW Offshore and PhenomeX 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 PhenomeX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and PhenomeX.
Diversification Opportunities for BW Offshore and PhenomeX
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BWOFY and PhenomeX is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and PhenomeX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PhenomeX 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 PhenomeX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PhenomeX has no effect on the direction of BW Offshore i.e., BW Offshore and PhenomeX go up and down completely randomly.
Pair Corralation between BW Offshore and PhenomeX
If you would invest 538.00 in BW Offshore Limited on September 5, 2024 and sell it today you would earn a total of 17.00 from holding BW Offshore Limited or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
BW Offshore Limited vs. PhenomeX
Performance |
| Timeline |
| BW Offshore Limited |
| PhenomeX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BW Offshore and PhenomeX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and PhenomeX
The main advantage of trading using opposite BW Offshore and PhenomeX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, PhenomeX 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 PhenomeX will offset losses from the drop in PhenomeX's long position.| BW Offshore vs. Siriuspoint | BW Offshore vs. NI Holdings | BW Offshore vs. Citizens | BW Offshore vs. Palomar Holdings |
| PhenomeX vs. Bassett Furniture Industries | PhenomeX vs. Hudson Pacific Properties | PhenomeX vs. Smith Douglas Homes | PhenomeX vs. Mid Atlantic Home Health |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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