Correlation Between BW Offshore and GoHealth
Can any of the company-specific risk be diversified away by investing in both BW Offshore and GoHealth 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 GoHealth 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 GoHealth, you can compare the effects of market volatilities on BW Offshore and GoHealth 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 GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and GoHealth.
Diversification Opportunities for BW Offshore and GoHealth
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BWOFY and GoHealth is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth 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 GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of BW Offshore i.e., BW Offshore and GoHealth go up and down completely randomly.
Pair Corralation between BW Offshore and GoHealth
Assuming the 90 days horizon BW Offshore Limited is expected to under-perform the GoHealth. But the pink sheet apears to be less risky and, when comparing its historical volatility, BW Offshore Limited is 1.72 times less risky than GoHealth. The pink sheet trades about -0.03 of its potential returns per unit of risk. The GoHealth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 939.00 in GoHealth on August 26, 2024 and sell it today you would earn a total of 251.00 from holding GoHealth or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore Limited vs. GoHealth
Performance |
| Timeline |
| BW Offshore Limited |
| GoHealth |
BW Offshore and GoHealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and GoHealth
The main advantage of trading using opposite BW Offshore and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.| BW Offshore vs. IPG Photonics | BW Offshore vs. BCB Bancorp | BW Offshore vs. PennantPark Floating Rate | BW Offshore vs. Mill City Ventures |
| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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