Correlation Between Cleantech Power and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Cleantech Power 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 Cleantech Power and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleantech Power Corp and BW Offshore Limited, you can compare the effects of market volatilities on Cleantech Power 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 Cleantech Power with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and BW Offshore.
Diversification Opportunities for Cleantech Power and BW Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cleantech and BWOFY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited and Cleantech Power 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 Cleantech Power Corp 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 Limited has no effect on the direction of Cleantech Power i.e., Cleantech Power and BW Offshore go up and down completely randomly.
Pair Corralation between Cleantech Power and BW Offshore
Assuming the 90 days horizon Cleantech Power Corp is expected to generate 59.94 times more return on investment than BW Offshore. However, Cleantech Power is 59.94 times more volatile than BW Offshore Limited. It trades about 0.1 of its potential returns per unit of risk. BW Offshore Limited is currently generating about 0.04 per unit of risk. If you would invest 4.78 in Cleantech Power Corp on September 13, 2024 and sell it today you would lose (4.19) from holding Cleantech Power Corp or give up 87.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 84.48% |
| Values | Daily Returns |
Cleantech Power Corp vs. BW Offshore Limited
Performance |
| Timeline |
| Cleantech Power Corp |
| BW Offshore Limited |
Cleantech Power and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleantech Power and BW Offshore
The main advantage of trading using opposite Cleantech Power and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleantech Power 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.| Cleantech Power vs. Fevertree Drinks Plc | Cleantech Power vs. Alvotech | Cleantech Power vs. Merit Medical Systems | Cleantech Power vs. Keurig Dr Pepper |
| BW Offshore vs. Legacy Education | BW Offshore vs. Apple Inc | BW Offshore vs. NVIDIA | BW Offshore vs. Microsoft |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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