Correlation Between BW OFFSHORE and Summit Materials
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on BW OFFSHORE and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Summit Materials.
Diversification Opportunities for BW OFFSHORE and Summit Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XY81 and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Summit Materials go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Summit Materials
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to under-perform the Summit Materials. In addition to that, BW OFFSHORE is 2.08 times more volatile than Summit Materials. It trades about -0.08 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.12 per unit of volatility. If you would invest 4,640 in Summit Materials on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Summit Materials or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Summit Materials
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Summit Materials |
BW OFFSHORE and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Summit Materials
The main advantage of trading using opposite BW OFFSHORE and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |