Correlation Between BW OFFSHORE and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and MOLSON COORS 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 MOLSON COORS 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 MOLSON RS BEVERAGE, you can compare the effects of market volatilities on BW OFFSHORE and MOLSON COORS 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 MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and MOLSON COORS.
Diversification Opportunities for BW OFFSHORE and MOLSON COORS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XY81 and MOLSON is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and MOLSON COORS go up and down completely randomly.
Pair Corralation between BW OFFSHORE and MOLSON COORS
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.89 times more return on investment than MOLSON COORS. However, BW OFFSHORE LTD is 1.13 times less risky than MOLSON COORS. It trades about 0.04 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.01 per unit of risk. If you would invest 197.00 in BW OFFSHORE LTD on October 16, 2024 and sell it today you would earn a total of 65.00 from holding BW OFFSHORE LTD or generate 32.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| BW OFFSHORE LTD |
| MOLSON RS BEVERAGE |
BW OFFSHORE and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and MOLSON COORS
The main advantage of trading using opposite BW OFFSHORE and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, MOLSON COORS 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 MOLSON COORS will offset losses from the drop in MOLSON COORS's long position.| BW OFFSHORE vs. GREENX METALS LTD | BW OFFSHORE vs. FORWARD AIR P | BW OFFSHORE vs. Ryanair Holdings plc | BW OFFSHORE vs. Jacquet Metal Service |
| MOLSON COORS vs. DXC Technology Co | MOLSON COORS vs. PKSHA TECHNOLOGY INC | MOLSON COORS vs. Align Technology | MOLSON COORS vs. NORTHEAST UTILITIES |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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