Correlation Between BW OFFSHORE and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Delta Electronics 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 Delta Electronics 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 Delta Electronics Public, you can compare the effects of market volatilities on BW OFFSHORE and Delta Electronics 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 Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Delta Electronics.
Diversification Opportunities for BW OFFSHORE and Delta Electronics
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XY81 and Delta is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Delta Electronics go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Delta Electronics
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.96 times less return on investment than Delta Electronics. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.13 times less risky than Delta Electronics. It trades about 0.06 of its potential returns per unit of risk. Delta Electronics Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 256.00 in Delta Electronics Public on November 7, 2024 and sell it today you would earn a total of 102.00 from holding Delta Electronics Public or generate 39.84% 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. Delta Electronics Public
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Delta Electronics Public |
BW OFFSHORE and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Delta Electronics
The main advantage of trading using opposite BW OFFSHORE and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Delta Electronics 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 Delta Electronics will offset losses from the drop in Delta Electronics' 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 |
| Delta Electronics vs. CVB Financial Corp | Delta Electronics vs. CHIBA BANK | Delta Electronics vs. Synovus Financial Corp | Delta Electronics vs. Direct Line Insurance |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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