Correlation Between BW OFFSHORE and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING, you can compare the effects of market volatilities on BW OFFSHORE and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and AOYAMA TRADING.
Diversification Opportunities for BW OFFSHORE and AOYAMA TRADING
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and AOYAMA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between BW OFFSHORE and AOYAMA TRADING
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 2.96 times less return on investment than AOYAMA TRADING. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.34 times less risky than AOYAMA TRADING. It trades about 0.06 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 800.00 in AOYAMA TRADING on November 7, 2024 and sell it today you would earn a total of 550.00 from holding AOYAMA TRADING or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. AOYAMA TRADING
Performance |
| Timeline |
| BW OFFSHORE LTD |
| AOYAMA TRADING |
BW OFFSHORE and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and AOYAMA TRADING
The main advantage of trading using opposite BW OFFSHORE and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING'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 |
| AOYAMA TRADING vs. Minerals Technologies | AOYAMA TRADING vs. BioNTech SE | AOYAMA TRADING vs. SOFI TECHNOLOGIES | AOYAMA TRADING vs. Tradegate AG Wertpapierhandelsbank |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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