Correlation Between BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4, you can compare the effects of market volatilities on BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/.
Diversification Opportunities for BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between XY81 and PROSIEBENSAT1 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSIEBENSAT1 MEDIADR4/ has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.
Pair Corralation between BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to under-perform the PROSIEBENSAT1 MEDIADR4/. But the stock apears to be less risky and, when comparing its historical volatility, BW OFFSHORE LTD is 1.16 times less risky than PROSIEBENSAT1 MEDIADR4/. The stock trades about -0.11 of its potential returns per unit of risk. The PROSIEBENSAT1 MEDIADR4 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 125.00 in PROSIEBENSAT1 MEDIADR4 on November 6, 2024 and sell it today you would earn a total of 10.00 from holding PROSIEBENSAT1 MEDIADR4 or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. PROSIEBENSAT1 MEDIADR4
Performance |
| Timeline |
| BW OFFSHORE LTD |
| PROSIEBENSAT1 MEDIADR4/ |
BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/
The main advantage of trading using opposite BW OFFSHORE and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ will offset losses from the drop in PROSIEBENSAT1 MEDIADR4/'s 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 |
| PROSIEBENSAT1 MEDIADR4/ vs. OFFICE DEPOT | PROSIEBENSAT1 MEDIADR4/ vs. The Japan Steel | PROSIEBENSAT1 MEDIADR4/ vs. SALESFORCE INC CDR | PROSIEBENSAT1 MEDIADR4/ vs. ANGANG STEEL H |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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