Correlation Between BW Offshore and Getty Realty
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Getty Realty 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 Getty Realty 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 Getty Realty, you can compare the effects of market volatilities on BW Offshore and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Getty Realty.
Diversification Opportunities for BW Offshore and Getty Realty
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BWOFY and Getty is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of BW Offshore i.e., BW Offshore and Getty Realty go up and down completely randomly.
Pair Corralation between BW Offshore and Getty Realty
Assuming the 90 days horizon BW Offshore is expected to generate 1.09 times less return on investment than Getty Realty. In addition to that, BW Offshore is 1.9 times more volatile than Getty Realty. It trades about 0.08 of its total potential returns per unit of risk. Getty Realty is currently generating about 0.16 per unit of volatility. If you would invest 2,585 in Getty Realty on September 13, 2024 and sell it today you would earn a total of 654.50 from holding Getty Realty or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
BW Offshore Limited vs. Getty Realty
Performance |
| Timeline |
| BW Offshore Limited |
| Getty Realty |
BW Offshore and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Getty Realty
The main advantage of trading using opposite BW Offshore and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.| BW Offshore vs. Legacy Education | BW Offshore vs. Apple Inc | BW Offshore vs. NVIDIA | BW Offshore vs. Microsoft |
| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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