Correlation Between Reinsurance Group and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and BW OFFSHORE LTD, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and BW OFFSHORE.
Diversification Opportunities for Reinsurance Group and BW OFFSHORE
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Reinsurance and XY81 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of 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 Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Reinsurance Group and BW OFFSHORE
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 0.72 times more return on investment than BW OFFSHORE. However, Reinsurance Group of is 1.39 times less risky than BW OFFSHORE. It trades about 0.07 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 13,214 in Reinsurance Group of on August 29, 2024 and sell it today you would earn a total of 8,386 from holding Reinsurance Group of or generate 63.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. BW OFFSHORE LTD
Performance |
| Timeline |
| Reinsurance Group |
| BW OFFSHORE LTD |
Reinsurance Group and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and BW OFFSHORE
The main advantage of trading using opposite Reinsurance Group and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. NMI Holdings | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. SIVERS SEMICONDUCTORS AB |
| BW OFFSHORE vs. BORR DRILLING NEW | BW OFFSHORE vs. CI GAMES SA | BW OFFSHORE vs. HOCHSCHILD MINING | BW OFFSHORE vs. TSOGO SUN GAMING |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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