Correlation Between Compagnie Plastic and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and BW OFFSHORE LTD, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and BW OFFSHORE.
Diversification Opportunities for Compagnie Plastic and BW OFFSHORE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compagnie and XY81 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Compagnie Plastic and BW OFFSHORE
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 0.95 times more return on investment than BW OFFSHORE. However, Compagnie Plastic Omnium is 1.06 times less risky than BW OFFSHORE. It trades about 0.14 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.05 per unit of risk. If you would invest 999.00 in Compagnie Plastic Omnium on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Compagnie Plastic Omnium or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. BW OFFSHORE LTD
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| BW OFFSHORE LTD |
Compagnie Plastic and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and BW OFFSHORE
The main advantage of trading using opposite Compagnie Plastic and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. Eidesvik Offshore ASA | Compagnie Plastic vs. ANTA SPORTS PRODUCT | Compagnie Plastic vs. COLUMBIA SPORTSWEAR | Compagnie Plastic vs. Columbia Sportswear |
| BW OFFSHORE vs. Schlumberger Limited | BW OFFSHORE vs. Halliburton | BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. China Oilfield Services |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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