Correlation Between BW OFFSHORE and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Canon Marketing 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 Canon Marketing 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 Canon Marketing Japan, you can compare the effects of market volatilities on BW OFFSHORE and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Canon Marketing.
Diversification Opportunities for BW OFFSHORE and Canon Marketing
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and Canon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Canon Marketing go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Canon Marketing
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 1.75 times more return on investment than Canon Marketing. However, BW OFFSHORE is 1.75 times more volatile than Canon Marketing Japan. It trades about 0.33 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about -0.05 per unit of risk. If you would invest 230.00 in BW OFFSHORE LTD on October 17, 2024 and sell it today you would earn a total of 32.00 from holding BW OFFSHORE LTD or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Canon Marketing Japan
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Canon Marketing Japan |
BW OFFSHORE and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Canon Marketing
The main advantage of trading using opposite BW OFFSHORE and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.| BW OFFSHORE vs. BANKINTER ADR 2007 | BW OFFSHORE vs. Perdoceo Education | BW OFFSHORE vs. CeoTronics AG | BW OFFSHORE vs. UNIQA INSURANCE GR |
| Canon Marketing vs. NTT DATA | Canon Marketing vs. Pure Storage | Canon Marketing vs. United Breweries Co | Canon Marketing vs. Northern Data 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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