Correlation Between BWX Technologies and Singapore Technologies
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Singapore Technologies 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 Singapore Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Singapore Technologies Engineering, you can compare the effects of market volatilities on BWX Technologies and Singapore Technologies 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 Singapore Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Singapore Technologies.
Diversification Opportunities for BWX Technologies and Singapore Technologies
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BWX and Singapore is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies 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 Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of BWX Technologies i.e., BWX Technologies and Singapore Technologies go up and down completely randomly.
Pair Corralation between BWX Technologies and Singapore Technologies
Given the investment horizon of 90 days BWX Technologies is expected to generate 0.9 times more return on investment than Singapore Technologies. However, BWX Technologies is 1.11 times less risky than Singapore Technologies. It trades about 0.11 of its potential returns per unit of risk. Singapore Technologies Engineering is currently generating about 0.05 per unit of risk. If you would invest 7,684 in BWX Technologies on September 12, 2024 and sell it today you would earn a total of 4,526 from holding BWX Technologies or generate 58.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.94% |
| Values | Daily Returns |
BWX Technologies vs. Singapore Technologies Enginee
Performance |
| Timeline |
| BWX Technologies |
| Singapore Technologies |
BWX Technologies and Singapore Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Singapore Technologies
The main advantage of trading using opposite BWX Technologies and Singapore Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Singapore Technologies 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 Singapore Technologies will offset losses from the drop in Singapore Technologies' long position.| BWX Technologies vs. Hexcel | BWX Technologies vs. Ducommun Incorporated | BWX Technologies vs. Mercury Systems | BWX Technologies vs. Woodward |
| Singapore Technologies vs. Airbus Group SE | Singapore Technologies vs. Safran SA | Singapore Technologies vs. Embraer SA ADR | Singapore Technologies vs. BAE Systems PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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