Correlation Between BW OFFSHORE and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on BW OFFSHORE and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and AIR PRODCHEMICALS.
Diversification Opportunities for BW OFFSHORE and AIR PRODCHEMICALS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XY81 and AIR is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between BW OFFSHORE and AIR PRODCHEMICALS
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 1.31 times more return on investment than AIR PRODCHEMICALS. However, BW OFFSHORE is 1.31 times more volatile than AIR PRODCHEMICALS. It trades about 0.08 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.07 per unit of risk. If you would invest 158.00 in BW OFFSHORE LTD on September 2, 2024 and sell it today you would earn a total of 80.00 from holding BW OFFSHORE LTD or generate 50.63% 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. AIR PRODCHEMICALS
Performance |
| Timeline |
| BW OFFSHORE LTD |
| AIR PRODCHEMICALS |
BW OFFSHORE and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and AIR PRODCHEMICALS
The main advantage of trading using opposite BW OFFSHORE and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. NMI Holdings | BW OFFSHORE vs. Origin Agritech | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| AIR PRODCHEMICALS vs. SIVERS SEMICONDUCTORS AB | AIR PRODCHEMICALS vs. Darden Restaurants | AIR PRODCHEMICALS vs. Reliance Steel Aluminum | AIR PRODCHEMICALS vs. Q2M Managementberatung AG |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |