Correlation Between BWX Technologies and Awilco Drilling
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Awilco Drilling 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 BWX Technologies and Awilco Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Awilco Drilling PLC, you can compare the effects of market volatilities on BWX Technologies and Awilco Drilling 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 BWX Technologies with a short position of Awilco Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Awilco Drilling.
Diversification Opportunities for BWX Technologies and Awilco Drilling
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BWX and Awilco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC and BWX Technologies 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 BWX Technologies are associated (or correlated) with Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of BWX Technologies i.e., BWX Technologies and Awilco Drilling go up and down completely randomly.
Pair Corralation between BWX Technologies and Awilco Drilling
Given the investment horizon of 90 days BWX Technologies is expected to generate 15.21 times less return on investment than Awilco Drilling. But when comparing it to its historical volatility, BWX Technologies is 31.67 times less risky than Awilco Drilling. It trades about 0.12 of its potential returns per unit of risk. Awilco Drilling PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Awilco Drilling PLC on August 31, 2024 and sell it today you would lose (808.00) from holding Awilco Drilling PLC or give up 80.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
BWX Technologies vs. Awilco Drilling PLC
Performance |
| Timeline |
| BWX Technologies |
| Awilco Drilling PLC |
BWX Technologies and Awilco Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Awilco Drilling
The main advantage of trading using opposite BWX Technologies and Awilco Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Awilco Drilling 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 Awilco Drilling will offset losses from the drop in Awilco Drilling's long position.| BWX Technologies vs. Innovative Solutions and | BWX Technologies vs. National Presto Industries | BWX Technologies vs. Hexcel | BWX Technologies vs. Park Electrochemical |
| Awilco Drilling vs. Oasis Hotel Resort | Awilco Drilling vs. Dine Brands Global | Awilco Drilling vs. Park Hotels Resorts | Awilco Drilling vs. Insteel Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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