Correlation Between BW OFFSHORE and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on BW OFFSHORE and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Advanced Micro.
Diversification Opportunities for BW OFFSHORE and Advanced Micro
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between XY81 and Advanced is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Advanced Micro go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Advanced Micro
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.82 times more return on investment than Advanced Micro. However, BW OFFSHORE LTD is 1.22 times less risky than Advanced Micro. It trades about 0.07 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.04 per unit of risk. If you would invest 178.00 in BW OFFSHORE LTD on November 5, 2024 and sell it today you would earn a total of 78.00 from holding BW OFFSHORE LTD or generate 43.82% 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. Advanced Micro Devices
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Advanced Micro Devices |
BW OFFSHORE and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Advanced Micro
The main advantage of trading using opposite BW OFFSHORE and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| BW OFFSHORE vs. AIR LIQUIDE ADR | BW OFFSHORE vs. Delta Air Lines | BW OFFSHORE vs. NORWEGIAN AIR SHUT | BW OFFSHORE vs. CHINA SOUTHN AIR H |
| Advanced Micro vs. PRECISION DRILLING P | Advanced Micro vs. Semiconductor Manufacturing International | Advanced Micro vs. Tower Semiconductor | Advanced Micro vs. Nordic Semiconductor 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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