Correlation Between BW OFFSHORE and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on BW OFFSHORE and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and ELMOS SEMICONDUCTOR.
Diversification Opportunities for BW OFFSHORE and ELMOS SEMICONDUCTOR
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and ELMOS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between BW OFFSHORE and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.82 times more return on investment than ELMOS SEMICONDUCTOR. However, BW OFFSHORE LTD is 1.21 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.07 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.0 per unit of risk. If you would invest 168.00 in BW OFFSHORE LTD on September 12, 2024 and sell it today you would earn a total of 65.00 from holding BW OFFSHORE LTD or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| BW OFFSHORE LTD |
| ELMOS SEMICONDUCTOR |
BW OFFSHORE and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite BW OFFSHORE and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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