Correlation Between BWX Technologies and Qinetiq Group
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Qinetiq Group 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 Qinetiq Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Qinetiq Group PLC, you can compare the effects of market volatilities on BWX Technologies and Qinetiq Group 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 Qinetiq Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Qinetiq Group.
Diversification Opportunities for BWX Technologies and Qinetiq Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BWX and Qinetiq is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Qinetiq Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinetiq Group 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 Qinetiq Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinetiq Group PLC has no effect on the direction of BWX Technologies i.e., BWX Technologies and Qinetiq Group go up and down completely randomly.
Pair Corralation between BWX Technologies and Qinetiq Group
Given the investment horizon of 90 days BWX Technologies is expected to generate 0.82 times more return on investment than Qinetiq Group. However, BWX Technologies is 1.22 times less risky than Qinetiq Group. It trades about 0.2 of its potential returns per unit of risk. Qinetiq Group PLC is currently generating about -0.1 per unit of risk. If you would invest 9,827 in BWX Technologies on September 12, 2024 and sell it today you would earn a total of 2,457 from holding BWX Technologies or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
BWX Technologies vs. Qinetiq Group PLC
Performance |
| Timeline |
| BWX Technologies |
| Qinetiq Group PLC |
BWX Technologies and Qinetiq Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Qinetiq Group
The main advantage of trading using opposite BWX Technologies and Qinetiq Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Qinetiq Group 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 Qinetiq Group will offset losses from the drop in Qinetiq Group's long position.| BWX Technologies vs. Hexcel | BWX Technologies vs. Ducommun Incorporated | BWX Technologies vs. Mercury Systems | BWX Technologies vs. Woodward |
| Qinetiq Group vs. Northrop Grumman | Qinetiq Group vs. L3Harris Technologies | Qinetiq Group vs. General Dynamics | Qinetiq Group vs. Curtiss Wright |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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