Correlation Between BW OFFSHORE and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on BW OFFSHORE and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and VARIOUS EATERIES.
Diversification Opportunities for BW OFFSHORE and VARIOUS EATERIES
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XY81 and VARIOUS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between BW OFFSHORE and VARIOUS EATERIES
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to under-perform the VARIOUS EATERIES. In addition to that, BW OFFSHORE is 2.22 times more volatile than VARIOUS EATERIES LS. It trades about -0.06 of its total potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about 0.01 per unit of volatility. If you would invest 21.00 in VARIOUS EATERIES LS on August 28, 2024 and sell it today you would earn a total of 0.00 from holding VARIOUS EATERIES LS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| BW OFFSHORE LTD |
| VARIOUS EATERIES |
BW OFFSHORE and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and VARIOUS EATERIES
The main advantage of trading using opposite BW OFFSHORE and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| BW OFFSHORE vs. Mitsui Chemicals | BW OFFSHORE vs. Harmony Gold Mining | BW OFFSHORE vs. ELMOS SEMICONDUCTOR | BW OFFSHORE vs. Cogent Communications Holdings |
| VARIOUS EATERIES vs. AXWAY SOFTWARE EO | VARIOUS EATERIES vs. FORMPIPE SOFTWARE AB | VARIOUS EATERIES vs. AEGEAN AIRLINES | VARIOUS EATERIES vs. JAPAN AIRLINES |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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