Correlation Between BW OFFSHORE and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and INTERCONT HOTELS 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 INTERCONT HOTELS 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 INTERCONT HOTELS, you can compare the effects of market volatilities on BW OFFSHORE and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and INTERCONT HOTELS.
Diversification Opportunities for BW OFFSHORE and INTERCONT HOTELS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and INTERCONT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between BW OFFSHORE and INTERCONT HOTELS
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.6 times less return on investment than INTERCONT HOTELS. In addition to that, BW OFFSHORE is 1.97 times more volatile than INTERCONT HOTELS. It trades about 0.04 of its total potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.14 per unit of volatility. If you would invest 11,500 in INTERCONT HOTELS on October 25, 2024 and sell it today you would earn a total of 700.00 from holding INTERCONT HOTELS or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. INTERCONT HOTELS
Performance |
| Timeline |
| BW OFFSHORE LTD |
| INTERCONT HOTELS |
BW OFFSHORE and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and INTERCONT HOTELS
The main advantage of trading using opposite BW OFFSHORE and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| BW OFFSHORE vs. TechnipFMC PLC | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. Origin Agritech | BW OFFSHORE vs. Identiv |
| INTERCONT HOTELS vs. Marriott International | INTERCONT HOTELS vs. Hilton Worldwide Holdings | INTERCONT HOTELS vs. H World Group | INTERCONT HOTELS vs. Hyatt Hotels |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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