Correlation Between BW OFFSHORE and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on BW OFFSHORE and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and FIREWEED METALS.
Diversification Opportunities for BW OFFSHORE and FIREWEED METALS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XY81 and FIREWEED is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and FIREWEED METALS go up and down completely randomly.
Pair Corralation between BW OFFSHORE and FIREWEED METALS
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.96 times less return on investment than FIREWEED METALS. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.58 times less risky than FIREWEED METALS. It trades about 0.04 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 62.00 in FIREWEED METALS P on October 27, 2024 and sell it today you would earn a total of 42.00 from holding FIREWEED METALS P or generate 67.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. FIREWEED METALS P
Performance |
| Timeline |
| BW OFFSHORE LTD |
| FIREWEED METALS P |
BW OFFSHORE and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and FIREWEED METALS
The main advantage of trading using opposite BW OFFSHORE and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| BW OFFSHORE vs. Monster Beverage Corp | BW OFFSHORE vs. Corporate Office Properties | BW OFFSHORE vs. Rayonier Advanced Materials | BW OFFSHORE vs. CENTURIA OFFICE REIT |
| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Anglo American plc | FIREWEED METALS vs. Mineral Resources Limited | FIREWEED METALS vs. NEXA RESOURCES SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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