Correlation Between Babcock Wilcox and Harrow Health
Can any of the company-specific risk be diversified away by investing in both Babcock Wilcox and Harrow Health 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 Babcock Wilcox and Harrow Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Babcock Wilcox Enterprises, and Harrow Health 8625, you can compare the effects of market volatilities on Babcock Wilcox and Harrow Health 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 Babcock Wilcox with a short position of Harrow Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babcock Wilcox and Harrow Health.
Diversification Opportunities for Babcock Wilcox and Harrow Health
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Babcock and Harrow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Babcock Wilcox Enterprises, and Harrow Health 8625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harrow Health 8625 and Babcock Wilcox 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 Babcock Wilcox Enterprises, are associated (or correlated) with Harrow Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harrow Health 8625 has no effect on the direction of Babcock Wilcox i.e., Babcock Wilcox and Harrow Health go up and down completely randomly.
Pair Corralation between Babcock Wilcox and Harrow Health
Given the investment horizon of 90 days Babcock Wilcox Enterprises, is expected to under-perform the Harrow Health. In addition to that, Babcock Wilcox is 2.32 times more volatile than Harrow Health 8625. It trades about -0.11 of its total potential returns per unit of risk. Harrow Health 8625 is currently generating about 0.1 per unit of volatility. If you would invest 2,521 in Harrow Health 8625 on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Harrow Health 8625 or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Babcock Wilcox Enterprises, vs. Harrow Health 8625
Performance |
| Timeline |
| Babcock Wilcox Enter |
| Harrow Health 8625 |
Babcock Wilcox and Harrow Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babcock Wilcox and Harrow Health
The main advantage of trading using opposite Babcock Wilcox and Harrow Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babcock Wilcox position performs unexpectedly, Harrow Health 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 Harrow Health will offset losses from the drop in Harrow Health's long position.| Babcock Wilcox vs. Harrow Health 8625 | Babcock Wilcox vs. Babcock Wilcox Enterprises | Babcock Wilcox vs. B Riley Financial | Babcock Wilcox vs. Eagle Point Credit |
| Harrow Health vs. Babcock Wilcox Enterprises, | Harrow Health vs. Babcock Wilcox Enterprises | Harrow Health vs. B Riley Financial | Harrow Health vs. SiriusPoint |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |