Correlation Between BW OFFSHORE and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on BW OFFSHORE and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Fast Retailing.
Diversification Opportunities for BW OFFSHORE and Fast Retailing
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and Fast is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Fast Retailing go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Fast Retailing
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 1.33 times more return on investment than Fast Retailing. However, BW OFFSHORE is 1.33 times more volatile than Fast Retailing Co. It trades about -0.01 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.08 per unit of risk. If you would invest 272.00 in BW OFFSHORE LTD on October 12, 2024 and sell it today you would lose (11.00) from holding BW OFFSHORE LTD or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Fast Retailing Co
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Fast Retailing |
BW OFFSHORE and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Fast Retailing
The main advantage of trading using opposite BW OFFSHORE and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| BW OFFSHORE vs. CarsalesCom | BW OFFSHORE vs. SANOK RUBBER ZY | BW OFFSHORE vs. Mitsubishi Materials | BW OFFSHORE vs. Vulcan Materials |
| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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