Correlation Between BW OFFSHORE and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on BW OFFSHORE and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and URBAN OUTFITTERS.
Diversification Opportunities for BW OFFSHORE and URBAN OUTFITTERS
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between XY81 and URBAN is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between BW OFFSHORE and URBAN OUTFITTERS
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 1.0 times more return on investment than URBAN OUTFITTERS. However, BW OFFSHORE LTD is 1.0 times less risky than URBAN OUTFITTERS. It trades about 0.17 of its potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.17 per unit of risk. If you would invest 235.00 in BW OFFSHORE LTD on October 25, 2024 and sell it today you would earn a total of 16.00 from holding BW OFFSHORE LTD or generate 6.81% 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. URBAN OUTFITTERS
Performance |
| Timeline |
| BW OFFSHORE LTD |
| URBAN OUTFITTERS |
BW OFFSHORE and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and URBAN OUTFITTERS
The main advantage of trading using opposite BW OFFSHORE and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| BW OFFSHORE vs. Fast Retailing Co | BW OFFSHORE vs. Westinghouse Air Brake | BW OFFSHORE vs. SALESFORCE INC CDR | BW OFFSHORE vs. TRADELINK ELECTRON |
| URBAN OUTFITTERS vs. GALENA MINING LTD | URBAN OUTFITTERS vs. ADRIATIC METALS LS 013355 | URBAN OUTFITTERS vs. Webster Financial | URBAN OUTFITTERS vs. CHIBA BANK |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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