Correlation Between CANON MARKETING and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and BW OFFSHORE 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 CANON MARKETING and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CANON MARKETING JP and BW OFFSHORE LTD, you can compare the effects of market volatilities on CANON MARKETING and BW OFFSHORE 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 CANON MARKETING with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and BW OFFSHORE.
Diversification Opportunities for CANON MARKETING and BW OFFSHORE
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CANON and XY81 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD and CANON MARKETING 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 CANON MARKETING JP are associated (or correlated) with BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and BW OFFSHORE go up and down completely randomly.
Pair Corralation between CANON MARKETING and BW OFFSHORE
Assuming the 90 days trading horizon CANON MARKETING JP is expected to under-perform the BW OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, CANON MARKETING JP is 1.62 times less risky than BW OFFSHORE. The stock trades about -0.13 of its potential returns per unit of risk. The BW OFFSHORE LTD is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 230.00 in BW OFFSHORE LTD on October 17, 2024 and sell it today you would earn a total of 32.00 from holding BW OFFSHORE LTD or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. BW OFFSHORE LTD
Performance |
| Timeline |
| CANON MARKETING JP |
| BW OFFSHORE LTD |
CANON MARKETING and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and BW OFFSHORE
The main advantage of trading using opposite CANON MARKETING and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| CANON MARKETING vs. Carnegie Clean Energy | CANON MARKETING vs. Harmony Gold Mining | CANON MARKETING vs. FIREWEED METALS P | CANON MARKETING vs. Playa Hotels Resorts |
| BW OFFSHORE vs. BANKINTER ADR 2007 | BW OFFSHORE vs. Perdoceo Education | BW OFFSHORE vs. CeoTronics AG | BW OFFSHORE vs. UNIQA INSURANCE GR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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