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 A, 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
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BWX and Coloplast is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Coloplast A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A 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 A 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 1.35 times more return on investment than Coloplast. However, BWX Technologies is 1.35 times more volatile than Coloplast A. It trades about 0.11 of its potential returns per unit of risk. Coloplast A is currently generating about 0.04 per unit of risk. If you would invest 12,461 in BWX Technologies on August 31, 2024 and sell it today you would earn a total of 584.00 from holding BWX Technologies or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BWX Technologies vs. Coloplast A
Performance |
| Timeline |
| BWX Technologies |
| Coloplast A |
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. Straumann Holding AG | Coloplast vs. Hoya Corp | Coloplast vs. EssilorLuxottica Socit anonyme | Coloplast vs. Essilor International SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |