Correlation Between BWX Technologies and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both BWX Technologies and Vonovia SE 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 Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BWX Technologies and Vonovia SE, you can compare the effects of market volatilities on BWX Technologies and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BWX Technologies and Vonovia SE.
Diversification Opportunities for BWX Technologies and Vonovia SE
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BWX and Vonovia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BWX Technologies and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of BWX Technologies i.e., BWX Technologies and Vonovia SE go up and down completely randomly.
Pair Corralation between BWX Technologies and Vonovia SE
Given the investment horizon of 90 days BWX Technologies is expected to generate 1.05 times less return on investment than Vonovia SE. But when comparing it to its historical volatility, BWX Technologies is 1.95 times less risky than Vonovia SE. It trades about 0.12 of its potential returns per unit of risk. Vonovia SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,912 in Vonovia SE on August 31, 2024 and sell it today you would earn a total of 1,363 from holding Vonovia SE or generate 71.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.43% |
| Values | Daily Returns |
BWX Technologies vs. Vonovia SE
Performance |
| Timeline |
| BWX Technologies |
| Vonovia SE |
BWX Technologies and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BWX Technologies and Vonovia SE
The main advantage of trading using opposite BWX Technologies and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BWX Technologies position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| BWX Technologies vs. Innovative Solutions and | BWX Technologies vs. National Presto Industries | BWX Technologies vs. Hexcel | BWX Technologies vs. Park Electrochemical |
| Vonovia SE vs. Vonovia SE ADR | Vonovia SE vs. CBRE Group Class | Vonovia SE vs. Opendoor Technologies | Vonovia SE vs. Jones Lang LaSalle |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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