Correlation Between BWX Technologies and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Kansai Electric 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 Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Kansai Electric Power, you can compare the effects of market volatilities on BWX Technologies and Kansai Electric 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 Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Kansai Electric.
Diversification Opportunities for BWX Technologies and Kansai Electric
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BWX and Kansai is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power 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 Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of BWX Technologies i.e., BWX Technologies and Kansai Electric go up and down completely randomly.
Pair Corralation between BWX Technologies and Kansai Electric
Given the investment horizon of 90 days BWX Technologies is expected to generate 0.42 times more return on investment than Kansai Electric. However, BWX Technologies is 2.38 times less risky than Kansai Electric. It trades about 0.11 of its potential returns per unit of risk. Kansai Electric Power is currently generating about -0.26 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BWX Technologies vs. Kansai Electric Power
Performance |
| Timeline |
| BWX Technologies |
| Kansai Electric Power |
BWX Technologies and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Kansai Electric
The main advantage of trading using opposite BWX Technologies and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| BWX Technologies vs. Innovative Solutions and | BWX Technologies vs. National Presto Industries | BWX Technologies vs. Hexcel | BWX Technologies vs. Park Electrochemical |
| Kansai Electric vs. Constellation Energy Corp | Kansai Electric vs. Orsted AS ADR | Kansai Electric vs. HUMANA INC | Kansai Electric vs. Aquagold International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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