Correlation Between BW OFFSHORE and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and AMADEUS IT 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 AMADEUS IT 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 AMADEUS IT GRP, you can compare the effects of market volatilities on BW OFFSHORE and AMADEUS IT 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 AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and AMADEUS IT.
Diversification Opportunities for BW OFFSHORE and AMADEUS IT
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XY81 and AMADEUS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and AMADEUS IT go up and down completely randomly.
Pair Corralation between BW OFFSHORE and AMADEUS IT
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 2.6 times more return on investment than AMADEUS IT. However, BW OFFSHORE is 2.6 times more volatile than AMADEUS IT GRP. It trades about 0.07 of its potential returns per unit of risk. AMADEUS IT GRP is currently generating about -0.01 per unit of risk. If you would invest 223.00 in BW OFFSHORE LTD on August 28, 2024 and sell it today you would earn a total of 17.00 from holding BW OFFSHORE LTD or generate 7.62% 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. AMADEUS IT GRP
Performance |
| Timeline |
| BW OFFSHORE LTD |
| AMADEUS IT GRP |
BW OFFSHORE and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and AMADEUS IT
The main advantage of trading using opposite BW OFFSHORE and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT's long position.| BW OFFSHORE vs. BORR DRILLING NEW | BW OFFSHORE vs. CI GAMES SA | BW OFFSHORE vs. HOCHSCHILD MINING | BW OFFSHORE vs. TSOGO SUN GAMING |
| AMADEUS IT vs. USWE SPORTS AB | AMADEUS IT vs. BW OFFSHORE LTD | AMADEUS IT vs. SOLSTAD OFFSHORE NK | AMADEUS IT vs. Solstad Offshore ASA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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