Correlation Between Everyman Media and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Everyman Media 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 Everyman Media and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everyman Media Group and BW Offshore, you can compare the effects of market volatilities on Everyman Media 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 Everyman Media with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everyman Media and BW Offshore.
Diversification Opportunities for Everyman Media and BW Offshore
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Everyman and 0RKH is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Everyman Media Group and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Everyman Media 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 Everyman Media Group 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 has no effect on the direction of Everyman Media i.e., Everyman Media and BW Offshore go up and down completely randomly.
Pair Corralation between Everyman Media and BW Offshore
Assuming the 90 days trading horizon Everyman Media Group is expected to under-perform the BW Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Everyman Media Group is 3.47 times less risky than BW Offshore. The stock trades about -0.08 of its potential returns per unit of risk. The BW Offshore is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,740 in BW Offshore on October 11, 2024 and sell it today you would earn a total of 265.00 from holding BW Offshore or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Everyman Media Group vs. BW Offshore
Performance |
| Timeline |
| Everyman Media Group |
| BW Offshore |
Everyman Media and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everyman Media and BW Offshore
The main advantage of trading using opposite Everyman Media and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyman Media 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.| Everyman Media vs. GoldMining | Everyman Media vs. iShares Physical Silver | Everyman Media vs. National Beverage Corp | Everyman Media vs. Eastinco Mining Exploration |
| BW Offshore vs. Aeorema Communications Plc | BW Offshore vs. Spirent Communications plc | BW Offshore vs. Polar Capital Technology | BW Offshore vs. Technicolor |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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