Correlation Between BW OFFSHORE and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on BW OFFSHORE and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Sekisui Chemical.
Diversification Opportunities for BW OFFSHORE and Sekisui Chemical
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between XY81 and Sekisui is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and Sekisui Chemical go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Sekisui Chemical
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to under-perform the Sekisui Chemical. In addition to that, BW OFFSHORE is 1.78 times more volatile than Sekisui Chemical Co. It trades about -0.06 of its total potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.25 per unit of volatility. If you would invest 1,280 in Sekisui Chemical Co on August 27, 2024 and sell it today you would earn a total of 130.00 from holding Sekisui Chemical Co or generate 10.16% 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. Sekisui Chemical Co
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Sekisui Chemical |
BW OFFSHORE and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Sekisui Chemical
The main advantage of trading using opposite BW OFFSHORE and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| BW OFFSHORE vs. Mitsui Chemicals | BW OFFSHORE vs. Harmony Gold Mining | BW OFFSHORE vs. ELMOS SEMICONDUCTOR | BW OFFSHORE vs. Cogent Communications Holdings |
| Sekisui Chemical vs. Ming Le Sports | Sekisui Chemical vs. Eidesvik Offshore ASA | Sekisui Chemical vs. PLAYTIKA HOLDING DL 01 | Sekisui Chemical vs. BW OFFSHORE LTD |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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