Correlation Between BW OFFSHORE and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE, you can compare the effects of market volatilities on BW OFFSHORE and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and WT OFFSHORE.
Diversification Opportunities for BW OFFSHORE and WT OFFSHORE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XY81 and UWV is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and WT OFFSHORE go up and down completely randomly.
Pair Corralation between BW OFFSHORE and WT OFFSHORE
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.74 times more return on investment than WT OFFSHORE. However, BW OFFSHORE LTD is 1.34 times less risky than WT OFFSHORE. It trades about 0.03 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.05 per unit of risk. If you would invest 186.00 in BW OFFSHORE LTD on August 30, 2024 and sell it today you would earn a total of 58.00 from holding BW OFFSHORE LTD or generate 31.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. WT OFFSHORE
Performance |
| Timeline |
| BW OFFSHORE LTD |
| WT OFFSHORE |
BW OFFSHORE and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and WT OFFSHORE
The main advantage of trading using opposite BW OFFSHORE and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. NMI Holdings | BW OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Superior Plus Corp | WT OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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