Correlation Between BW OFFSHORE and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and SANOK RUBBER 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 SANOK RUBBER 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 SANOK RUBBER ZY, you can compare the effects of market volatilities on BW OFFSHORE and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and SANOK RUBBER.
Diversification Opportunities for BW OFFSHORE and SANOK RUBBER
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XY81 and SANOK is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and SANOK RUBBER go up and down completely randomly.
Pair Corralation between BW OFFSHORE and SANOK RUBBER
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 5.81 times less return on investment than SANOK RUBBER. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.31 times less risky than SANOK RUBBER. It trades about 0.03 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 350.00 in SANOK RUBBER ZY on September 2, 2024 and sell it today you would earn a total of 95.00 from holding SANOK RUBBER ZY or generate 27.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. SANOK RUBBER ZY
Performance |
| Timeline |
| BW OFFSHORE LTD |
| SANOK RUBBER ZY |
BW OFFSHORE and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and SANOK RUBBER
The main advantage of trading using opposite BW OFFSHORE and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. NMI Holdings | BW OFFSHORE vs. Origin Agritech | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| SANOK RUBBER vs. T Mobile | SANOK RUBBER vs. National Bank Holdings | SANOK RUBBER vs. The Hanover Insurance | SANOK RUBBER vs. JSC Halyk bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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