Correlation Between SunOpta and BW Offshore
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and BW Offshore Limited, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and BW Offshore.
Diversification Opportunities for SunOpta and BW Offshore
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and BWOFY is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and BW Offshore go up and down completely randomly.
Pair Corralation between SunOpta and BW Offshore
Given the investment horizon of 90 days SunOpta is expected to generate 1.24 times less return on investment than BW Offshore. In addition to that, SunOpta is 1.99 times more volatile than BW Offshore Limited. It trades about 0.08 of its total potential returns per unit of risk. BW Offshore Limited is currently generating about 0.2 per unit of volatility. If you would invest 538.00 in BW Offshore Limited on September 13, 2024 and sell it today you would earn a total of 17.00 from holding BW Offshore Limited or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. BW Offshore Limited
Performance |
| Timeline |
| SunOpta |
| BW Offshore Limited |
SunOpta and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and BW Offshore
The main advantage of trading using opposite SunOpta and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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