Correlation Between Kawasaki Kisen and BW LPG
Can any of the company-specific risk be diversified away by investing in both Kawasaki Kisen and BW LPG 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 Kawasaki Kisen and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kawasaki Kisen Kaisha and BW LPG, you can compare the effects of market volatilities on Kawasaki Kisen and BW LPG 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 Kawasaki Kisen with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawasaki Kisen and BW LPG.
Diversification Opportunities for Kawasaki Kisen and BW LPG
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kawasaki and BWLLY is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kawasaki Kisen Kaisha and BW LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG and Kawasaki Kisen 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 Kawasaki Kisen Kaisha are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG has no effect on the direction of Kawasaki Kisen i.e., Kawasaki Kisen and BW LPG go up and down completely randomly.
Pair Corralation between Kawasaki Kisen and BW LPG
Assuming the 90 days horizon Kawasaki Kisen Kaisha is expected to generate 1.54 times more return on investment than BW LPG. However, Kawasaki Kisen is 1.54 times more volatile than BW LPG. It trades about 0.1 of its potential returns per unit of risk. BW LPG is currently generating about 0.07 per unit of risk. If you would invest 545.00 in Kawasaki Kisen Kaisha on September 2, 2024 and sell it today you would earn a total of 925.00 from holding Kawasaki Kisen Kaisha or generate 169.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.29% |
| Values | Daily Returns |
Kawasaki Kisen Kaisha vs. BW LPG
Performance |
| Timeline |
| Kawasaki Kisen Kaisha |
| BW LPG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kawasaki Kisen and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kawasaki Kisen and BW LPG
The main advantage of trading using opposite Kawasaki Kisen and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawasaki Kisen position performs unexpectedly, BW LPG 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 LPG will offset losses from the drop in BW LPG's long position.| Kawasaki Kisen vs. Pacific Basin Shipping | Kawasaki Kisen vs. Hapag Lloyd Aktiengesellschaft | Kawasaki Kisen vs. Hapag Lloyd Aktiengesellschaft | Kawasaki Kisen vs. Hutchison Port Holdings |
| BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. Pacific Basin Shipping | BW LPG vs. Hapag Lloyd Aktiengesellschaft | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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