Correlation Between Salmon Evolution and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Salmon Evolution 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 Salmon Evolution and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salmon Evolution Holding and BW Offshore, you can compare the effects of market volatilities on Salmon Evolution 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 Salmon Evolution with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salmon Evolution and BW Offshore.
Diversification Opportunities for Salmon Evolution and BW Offshore
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salmon and BWO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Salmon Evolution Holding and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Salmon Evolution 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 Salmon Evolution Holding 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 has no effect on the direction of Salmon Evolution i.e., Salmon Evolution and BW Offshore go up and down completely randomly.
Pair Corralation between Salmon Evolution and BW Offshore
Assuming the 90 days trading horizon Salmon Evolution Holding is expected to generate 0.52 times more return on investment than BW Offshore. However, Salmon Evolution Holding is 1.92 times less risky than BW Offshore. It trades about -0.03 of its potential returns per unit of risk. BW Offshore is currently generating about -0.07 per unit of risk. If you would invest 698.00 in Salmon Evolution Holding on September 13, 2024 and sell it today you would lose (12.00) from holding Salmon Evolution Holding or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salmon Evolution Holding vs. BW Offshore
Performance |
| Timeline |
| Salmon Evolution Holding |
| BW Offshore |
Salmon Evolution and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salmon Evolution and BW Offshore
The main advantage of trading using opposite Salmon Evolution and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salmon Evolution 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.| Salmon Evolution vs. Awilco Drilling PLC | Salmon Evolution vs. Lery Seafood Group | Salmon Evolution vs. Austevoll Seafood ASA | Salmon Evolution vs. Grieg Seafood ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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