Correlation Between BW OFFSHORE and GUDANG GARAM
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and GUDANG GARAM 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 GUDANG GARAM 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 GUDANG GARAM, you can compare the effects of market volatilities on BW OFFSHORE and GUDANG GARAM 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 GUDANG GARAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and GUDANG GARAM.
Diversification Opportunities for BW OFFSHORE and GUDANG GARAM
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and GUDANG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and GUDANG GARAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUDANG GARAM 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 GUDANG GARAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUDANG GARAM has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and GUDANG GARAM go up and down completely randomly.
Pair Corralation between BW OFFSHORE and GUDANG GARAM
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.85 times more return on investment than GUDANG GARAM. However, BW OFFSHORE LTD is 1.17 times less risky than GUDANG GARAM. It trades about -0.11 of its potential returns per unit of risk. GUDANG GARAM is currently generating about -0.52 per unit of risk. If you would invest 268.00 in BW OFFSHORE LTD on November 6, 2024 and sell it today you would lose (12.00) from holding BW OFFSHORE LTD or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. GUDANG GARAM
Performance |
| Timeline |
| BW OFFSHORE LTD |
| GUDANG GARAM |
BW OFFSHORE and GUDANG GARAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and GUDANG GARAM
The main advantage of trading using opposite BW OFFSHORE and GUDANG GARAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, GUDANG GARAM 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 GUDANG GARAM will offset losses from the drop in GUDANG GARAM's long position.| BW OFFSHORE vs. East Africa Metals | BW OFFSHORE vs. Sunny Optical Technology | BW OFFSHORE vs. MAGNUM MINING EXP | BW OFFSHORE vs. Zijin Mining Group |
| GUDANG GARAM vs. SOUTHWEST AIRLINES | GUDANG GARAM vs. American Airlines Group | GUDANG GARAM vs. EEDUCATION ALBERT AB | GUDANG GARAM vs. AEGEAN AIRLINES |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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