Correlation Between BW OFFSHORE and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and HYATT HOTELS-A 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 BW OFFSHORE and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW OFFSHORE LTD and HYATT HOTELS A, you can compare the effects of market volatilities on BW OFFSHORE and HYATT HOTELS-A 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 BW OFFSHORE with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and HYATT HOTELS-A.
Diversification Opportunities for BW OFFSHORE and HYATT HOTELS-A
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between XY81 and HYATT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and BW OFFSHORE 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 BW OFFSHORE LTD are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between BW OFFSHORE and HYATT HOTELS-A
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to under-perform the HYATT HOTELS-A. In addition to that, BW OFFSHORE is 1.64 times more volatile than HYATT HOTELS A. It trades about -0.11 of its total potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.03 per unit of volatility. If you would invest 15,115 in HYATT HOTELS A on November 6, 2024 and sell it today you would earn a total of 90.00 from holding HYATT HOTELS A or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. HYATT HOTELS A
Performance |
| Timeline |
| BW OFFSHORE LTD |
| HYATT HOTELS A |
BW OFFSHORE and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and HYATT HOTELS-A
The main advantage of trading using opposite BW OFFSHORE and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.| BW OFFSHORE vs. East Africa Metals | BW OFFSHORE vs. Sunny Optical Technology | BW OFFSHORE vs. MAGNUM MINING EXP | BW OFFSHORE vs. Zijin Mining Group |
| HYATT HOTELS-A vs. CarsalesCom | HYATT HOTELS-A vs. ZhongAn Online P | HYATT HOTELS-A vs. Cairo Communication SpA | HYATT HOTELS-A vs. Zoom Video Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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