Correlation Between BW Offshore and SGS SA
Can any of the company-specific risk be diversified away by investing in both BW Offshore and SGS SA 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 SGS SA 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 SGS SA, you can compare the effects of market volatilities on BW Offshore and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and SGS SA.
Diversification Opportunities for BW Offshore and SGS SA
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BWOFY and SGS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of BW Offshore i.e., BW Offshore and SGS SA go up and down completely randomly.
Pair Corralation between BW Offshore and SGS SA
Assuming the 90 days horizon BW Offshore Limited is expected to generate 0.57 times more return on investment than SGS SA. However, BW Offshore Limited is 1.75 times less risky than SGS SA. It trades about 0.2 of its potential returns per unit of risk. SGS SA is currently generating about -0.21 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW Offshore Limited vs. SGS SA
Performance |
| Timeline |
| BW Offshore Limited |
| SGS SA |
BW Offshore and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and SGS SA
The main advantage of trading using opposite BW Offshore and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| BW Offshore vs. Siriuspoint | BW Offshore vs. NI Holdings | BW Offshore vs. Citizens | BW Offshore vs. Palomar Holdings |
| SGS SA vs. CVW CleanTech | SGS SA vs. The Hanover Insurance | SGS SA vs. Pekin Life Insurance | SGS SA vs. Ecoloclean Industrs |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |