Correlation Between BW Offshore and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on BW Offshore and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Mativ Holdings.
Diversification Opportunities for BW Offshore and Mativ Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BWOFY and Mativ is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of BW Offshore i.e., BW Offshore and Mativ Holdings go up and down completely randomly.
Pair Corralation between BW Offshore and Mativ Holdings
Assuming the 90 days horizon BW Offshore Limited is expected to generate 0.83 times more return on investment than Mativ Holdings. However, BW Offshore Limited is 1.2 times less risky than Mativ Holdings. It trades about 0.11 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.12 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore Limited vs. Mativ Holdings
Performance |
| Timeline |
| BW Offshore Limited |
| Mativ Holdings |
BW Offshore and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Mativ Holdings
The main advantage of trading using opposite BW Offshore and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| BW Offshore vs. Citizens | BW Offshore vs. Smith Douglas Homes | BW Offshore vs. Old Republic International | BW Offshore vs. Hudson Pacific Properties |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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