Correlation Between BWX Technologies and Coloplast
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Coloplast 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 Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Coloplast AS, you can compare the effects of market volatilities on BWX Technologies and Coloplast 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 Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Coloplast.
Diversification Opportunities for BWX Technologies and Coloplast
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BWX and Coloplast is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast AS 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 Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast AS has no effect on the direction of BWX Technologies i.e., BWX Technologies and Coloplast go up and down completely randomly.
Pair Corralation between BWX Technologies and Coloplast
Given the investment horizon of 90 days BWX Technologies is expected to generate 0.68 times more return on investment than Coloplast. However, BWX Technologies is 1.48 times less risky than Coloplast. It trades about 0.12 of its potential returns per unit of risk. Coloplast AS is currently generating about 0.02 per unit of risk. If you would invest 6,366 in BWX Technologies on August 31, 2024 and sell it today you would earn a total of 6,719 from holding BWX Technologies or generate 105.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.65% |
| Values | Daily Returns |
BWX Technologies vs. Coloplast AS
Performance |
| Timeline |
| BWX Technologies |
| Coloplast AS |
BWX Technologies and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Coloplast
The main advantage of trading using opposite BWX Technologies and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| BWX Technologies vs. Innovative Solutions and | BWX Technologies vs. National Presto Industries | BWX Technologies vs. Hexcel | BWX Technologies vs. Park Electrochemical |
| Coloplast vs. Sysmex Corp | Coloplast vs. Straumann Holding AG | Coloplast vs. Essilor International SA | Coloplast vs. EssilorLuxottica Socit anonyme |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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