Correlation Between BW OFFSHORE and Banpu PCL
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Banpu PCL 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 Banpu PCL 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 Banpu PCL, you can compare the effects of market volatilities on BW OFFSHORE and Banpu PCL 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 Banpu PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Banpu PCL.
Diversification Opportunities for BW OFFSHORE and Banpu PCL
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XY81 and Banpu is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL 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 Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Banpu PCL go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Banpu PCL
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.38 times more return on investment than Banpu PCL. However, BW OFFSHORE LTD is 2.62 times less risky than Banpu PCL. It trades about 0.03 of its potential returns per unit of risk. Banpu PCL is currently generating about 0.0 per unit of risk. If you would invest 184.00 in BW OFFSHORE LTD on September 13, 2024 and sell it today you would earn a total of 49.00 from holding BW OFFSHORE LTD or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Banpu PCL
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Banpu PCL |
BW OFFSHORE and Banpu PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Banpu PCL
The main advantage of trading using opposite BW OFFSHORE and Banpu PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Banpu PCL 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 Banpu PCL will offset losses from the drop in Banpu PCL'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 |
| Banpu PCL vs. Tower One Wireless | Banpu PCL vs. AIR LIQUIDE ADR | Banpu PCL vs. Mobilezone Holding AG | Banpu PCL vs. Verizon Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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