Correlation Between EHEALTH and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and BW OFFSHORE LTD, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and BW OFFSHORE.
Diversification Opportunities for EHEALTH and BW OFFSHORE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EHEALTH and XY81 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH 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 EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and BW OFFSHORE go up and down completely randomly.
Pair Corralation between EHEALTH and BW OFFSHORE
Assuming the 90 days trading horizon EHEALTH is expected to generate 2.02 times more return on investment than BW OFFSHORE. However, EHEALTH is 2.02 times more volatile than BW OFFSHORE LTD. It trades about 0.03 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.03 per unit of risk. If you would invest 392.00 in EHEALTH on August 28, 2024 and sell it today you would earn a total of 81.00 from holding EHEALTH or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. BW OFFSHORE LTD
Performance |
| Timeline |
| EHEALTH |
| BW OFFSHORE LTD |
EHEALTH and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and BW OFFSHORE
The main advantage of trading using opposite EHEALTH and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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.| EHEALTH vs. FUYO GENERAL LEASE | EHEALTH vs. EAGLE MATERIALS | EHEALTH vs. Fast Retailing Co | EHEALTH vs. Lendlease Group |
| BW OFFSHORE vs. Mitsui Chemicals | BW OFFSHORE vs. Harmony Gold Mining | BW OFFSHORE vs. ELMOS SEMICONDUCTOR | BW OFFSHORE vs. Cogent Communications Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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