Correlation Between Bristow and Weatherford International
Can any of the company-specific risk be diversified away by investing in both Bristow and Weatherford International 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 Bristow and Weatherford International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristow Group and Weatherford International PLC, you can compare the effects of market volatilities on Bristow and Weatherford International 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 Bristow with a short position of Weatherford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and Weatherford International.
Diversification Opportunities for Bristow and Weatherford International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristow and Weatherford is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Weatherford International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weatherford International and Bristow 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 Bristow Group are associated (or correlated) with Weatherford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weatherford International has no effect on the direction of Bristow i.e., Bristow and Weatherford International go up and down completely randomly.
Pair Corralation between Bristow and Weatherford International
Given the investment horizon of 90 days Bristow Group is expected to generate 0.66 times more return on investment than Weatherford International. However, Bristow Group is 1.51 times less risky than Weatherford International. It trades about -0.25 of its potential returns per unit of risk. Weatherford International PLC is currently generating about -0.33 per unit of risk. If you would invest 3,591 in Bristow Group on November 4, 2024 and sell it today you would lose (254.00) from holding Bristow Group or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristow Group vs. Weatherford International PLC
Performance |
| Timeline |
| Bristow Group |
| Weatherford International |
Bristow and Weatherford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristow and Weatherford International
The main advantage of trading using opposite Bristow and Weatherford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow position performs unexpectedly, Weatherford International 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 Weatherford International will offset losses from the drop in Weatherford International's long position.| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
| Weatherford International vs. Bristow Group | Weatherford International vs. RPC Inc | Weatherford International vs. NOV Inc | Weatherford International vs. Oceaneering International |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |