Correlation Between OPEN HOUSE and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both OPEN HOUSE 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 OPEN HOUSE and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPEN HOUSE GROUP and BW OFFSHORE LTD, you can compare the effects of market volatilities on OPEN HOUSE 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 OPEN HOUSE with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPEN HOUSE and BW OFFSHORE.
Diversification Opportunities for OPEN HOUSE and BW OFFSHORE
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPEN and XY81 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding OPEN HOUSE GROUP 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 OPEN HOUSE 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 OPEN HOUSE 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 LTD has no effect on the direction of OPEN HOUSE i.e., OPEN HOUSE and BW OFFSHORE go up and down completely randomly.
Pair Corralation between OPEN HOUSE and BW OFFSHORE
Assuming the 90 days horizon OPEN HOUSE GROUP is expected to generate 0.6 times more return on investment than BW OFFSHORE. However, OPEN HOUSE GROUP is 1.67 times less risky than BW OFFSHORE. It trades about 0.09 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about -0.02 per unit of risk. If you would invest 3,380 in OPEN HOUSE GROUP on August 26, 2024 and sell it today you would earn a total of 120.00 from holding OPEN HOUSE GROUP or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPEN HOUSE GROUP vs. BW OFFSHORE LTD
Performance |
| Timeline |
| OPEN HOUSE GROUP |
| BW OFFSHORE LTD |
OPEN HOUSE and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPEN HOUSE and BW OFFSHORE
The main advantage of trading using opposite OPEN HOUSE and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPEN HOUSE 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.| OPEN HOUSE vs. BW OFFSHORE LTD | OPEN HOUSE vs. Iridium Communications | OPEN HOUSE vs. BJs Restaurants | OPEN HOUSE vs. Verizon Communications |
| BW OFFSHORE vs. COMMERCIAL VEHICLE | BW OFFSHORE vs. Pembina Pipeline Corp | BW OFFSHORE vs. GRUPO CARSO A1 | BW OFFSHORE vs. AEGEAN AIRLINES |
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 Stocks Directory module to find actively traded stocks across global markets.
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