Correlation Between SCHMID Group and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both SCHMID Group and Babcock Wilcox 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 SCHMID Group and Babcock Wilcox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCHMID Group NV and Babcock Wilcox Enterprises, you can compare the effects of market volatilities on SCHMID Group and Babcock Wilcox 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 SCHMID Group with a short position of Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Babcock Wilcox.
Diversification Opportunities for SCHMID Group and Babcock Wilcox
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SCHMID and Babcock is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter and SCHMID 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 SCHMID Group NV are associated (or correlated) with Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of SCHMID Group i.e., SCHMID Group and Babcock Wilcox go up and down completely randomly.
Pair Corralation between SCHMID Group and Babcock Wilcox
Assuming the 90 days horizon SCHMID Group NV is expected to generate 1.56 times more return on investment than Babcock Wilcox. However, SCHMID Group is 1.56 times more volatile than Babcock Wilcox Enterprises. It trades about 0.07 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.09 per unit of risk. If you would invest 25.00 in SCHMID Group NV on August 26, 2024 and sell it today you would earn a total of 1.00 from holding SCHMID Group NV or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
SCHMID Group NV vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| SCHMID Group NV |
| Babcock Wilcox Enter |
SCHMID Group and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCHMID Group and Babcock Wilcox
The main advantage of trading using opposite SCHMID Group and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHMID Group position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| SCHMID Group vs. Barnes Group | SCHMID Group vs. Babcock Wilcox Enterprises | SCHMID Group vs. Crane Company | SCHMID Group vs. Hillenbrand |
| Babcock Wilcox vs. Barnes Group | Babcock Wilcox vs. Crane Company | Babcock Wilcox vs. Hillenbrand | Babcock Wilcox vs. Ingersoll Rand |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |