Correlation Between Pacific Basin and BW LPG
Can any of the company-specific risk be diversified away by investing in both Pacific Basin 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 Pacific Basin and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Basin Shipping and BW LPG, you can compare the effects of market volatilities on Pacific Basin 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 Pacific Basin with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Basin and BW LPG.
Diversification Opportunities for Pacific Basin and BW LPG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pacific and BWLLY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Basin Shipping and BW LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG and Pacific Basin 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 Pacific Basin Shipping 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 Pacific Basin i.e., Pacific Basin and BW LPG go up and down completely randomly.
Pair Corralation between Pacific Basin and BW LPG
If you would invest 427.00 in Pacific Basin Shipping on November 28, 2024 and sell it today you would lose (21.00) from holding Pacific Basin Shipping or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Pacific Basin Shipping vs. BW LPG
Performance |
| Timeline |
| Pacific Basin Shipping |
| BW LPG |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Pacific Basin and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Basin and BW LPG
The main advantage of trading using opposite Pacific Basin and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Basin 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.| Pacific Basin vs. Kawasaki Kisen Kaisha | Pacific Basin vs. Hapag Lloyd Aktiengesellschaft | Pacific Basin vs. Hapag Lloyd Aktiengesellschaft | Pacific Basin vs. SITC International 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 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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