Correlation Between BW OFFSHORE and X Fab
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on BW OFFSHORE and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and X Fab.
Diversification Opportunities for BW OFFSHORE and X Fab
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between XY81 and XFB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of BW OFFSHORE i.e., BW OFFSHORE and X Fab go up and down completely randomly.
Pair Corralation between BW OFFSHORE and X Fab
Assuming the 90 days trading horizon BW OFFSHORE LTD is expected to generate 0.95 times more return on investment than X Fab. However, BW OFFSHORE LTD is 1.05 times less risky than X Fab. It trades about 0.04 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.01 per unit of risk. If you would invest 180.00 in BW OFFSHORE LTD on September 8, 2024 and sell it today you would earn a total of 58.00 from holding BW OFFSHORE LTD or generate 32.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. X Fab Silicon
Performance |
| Timeline |
| BW OFFSHORE LTD |
| X Fab Silicon |
BW OFFSHORE and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and X Fab
The main advantage of trading using opposite BW OFFSHORE and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab's long position.| BW OFFSHORE vs. OAKTRSPECLENDNEW | BW OFFSHORE vs. CarsalesCom | BW OFFSHORE vs. VIRG NATL BANKSH | BW OFFSHORE vs. Tradegate AG Wertpapierhandelsbank |
| X Fab vs. Algonquin Power Utilities | X Fab vs. Dave Busters Entertainment | X Fab vs. Townsquare Media | X Fab vs. Nordic Semiconductor ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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