Correlation Between BW OFFSHORE and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on BW OFFSHORE and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and CENTURIA OFFICE.
Diversification Opportunities for BW OFFSHORE and CENTURIA OFFICE
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XY81 and CENTURIA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between BW OFFSHORE and CENTURIA OFFICE
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 1.36 times more return on investment than CENTURIA OFFICE. However, BW OFFSHORE is 1.36 times more volatile than CENTURIA OFFICE REIT. It trades about 0.04 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about -0.01 per unit of risk. If you would invest 189.00 in BW OFFSHORE LTD on October 25, 2024 and sell it today you would earn a total of 62.00 from holding BW OFFSHORE LTD or generate 32.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| BW OFFSHORE LTD |
| CENTURIA OFFICE REIT |
BW OFFSHORE and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and CENTURIA OFFICE
The main advantage of trading using opposite BW OFFSHORE and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| BW OFFSHORE vs. TechnipFMC PLC | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. Origin Agritech | BW OFFSHORE vs. Identiv |
| CENTURIA OFFICE vs. US FOODS HOLDING | CENTURIA OFFICE vs. PENN NATL GAMING | CENTURIA OFFICE vs. FRACTAL GAMING GROUP | CENTURIA OFFICE vs. GigaMedia |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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