Correlation Between BW Offshore and Figs
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Figs 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 Figs 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 Figs Inc, you can compare the effects of market volatilities on BW Offshore and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Figs.
Diversification Opportunities for BW Offshore and Figs
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between BWOFY and Figs is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of BW Offshore i.e., BW Offshore and Figs go up and down completely randomly.
Pair Corralation between BW Offshore and Figs
Assuming the 90 days horizon BW Offshore Limited is expected to generate 0.65 times more return on investment than Figs. However, BW Offshore Limited is 1.53 times less risky than Figs. It trades about 0.11 of its potential returns per unit of risk. Figs Inc is currently generating about -0.03 per unit of risk. If you would invest 461.00 in BW Offshore Limited on August 30, 2024 and sell it today you would earn a total of 94.00 from holding BW Offshore Limited or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore Limited vs. Figs Inc
Performance |
| Timeline |
| BW Offshore Limited |
| Figs Inc |
BW Offshore and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Figs
The main advantage of trading using opposite BW Offshore and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| BW Offshore vs. Citizens | BW Offshore vs. Smith Douglas Homes | BW Offshore vs. Old Republic International | BW Offshore vs. Hudson Pacific Properties |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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