Correlation Between WILLIS LEASE and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE 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 WILLIS LEASE and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WILLIS LEASE FIN and BW OFFSHORE LTD, you can compare the effects of market volatilities on WILLIS LEASE 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 WILLIS LEASE with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and BW OFFSHORE.
Diversification Opportunities for WILLIS LEASE and BW OFFSHORE
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WILLIS and XY81 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN 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 WILLIS LEASE 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 WILLIS LEASE FIN 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 WILLIS LEASE i.e., WILLIS LEASE and BW OFFSHORE go up and down completely randomly.
Pair Corralation between WILLIS LEASE and BW OFFSHORE
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 0.81 times more return on investment than BW OFFSHORE. However, WILLIS LEASE FIN is 1.24 times less risky than BW OFFSHORE. It trades about 0.03 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about -0.08 per unit of risk. If you would invest 19,000 in WILLIS LEASE FIN on September 13, 2024 and sell it today you would earn a total of 200.00 from holding WILLIS LEASE FIN or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. BW OFFSHORE LTD
Performance |
| Timeline |
| WILLIS LEASE FIN |
| BW OFFSHORE LTD |
WILLIS LEASE and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and BW OFFSHORE
The main advantage of trading using opposite WILLIS LEASE and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE 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.| WILLIS LEASE vs. United Rentals | WILLIS LEASE vs. WillScot Mobile Mini | WILLIS LEASE vs. Superior Plus Corp | WILLIS LEASE vs. SIVERS SEMICONDUCTORS AB |
| BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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