Correlation Between Uber Technologies and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Uber Technologies 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 Uber Technologies and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and BW OFFSHORE LTD, you can compare the effects of market volatilities on Uber Technologies 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 Uber Technologies with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and BW OFFSHORE.
Diversification Opportunities for Uber Technologies and BW OFFSHORE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uber and XY81 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies 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 Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Uber Technologies and BW OFFSHORE
Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the BW OFFSHORE. In addition to that, Uber Technologies is 1.14 times more volatile than BW OFFSHORE LTD. It trades about -0.02 of its total potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.0 per unit of volatility. If you would invest 242.00 in BW OFFSHORE LTD on September 24, 2024 and sell it today you would lose (12.00) from holding BW OFFSHORE LTD or give up 4.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. BW OFFSHORE LTD
Performance |
| Timeline |
| Uber Technologies |
| BW OFFSHORE LTD |
Uber Technologies and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and BW OFFSHORE
The main advantage of trading using opposite Uber Technologies and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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.| Uber Technologies vs. BW OFFSHORE LTD | Uber Technologies vs. Jacquet Metal Service | Uber Technologies vs. WT OFFSHORE | Uber Technologies vs. ADRIATIC METALS LS 013355 |
| BW OFFSHORE vs. Grand Canyon Education | BW OFFSHORE vs. Gamma Communications plc | BW OFFSHORE vs. CHINA EDUCATION GROUP | BW OFFSHORE vs. INTERSHOP Communications Aktiengesellschaft |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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