Correlation Between MOVIE GAMES and BW OFFSHORE

Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and BW 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 MOVIE GAMES and BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOVIE GAMES SA and BW OFFSHORE LTD, you can compare the effects of market volatilities on MOVIE GAMES and BW 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 MOVIE GAMES with a short position of BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and BW OFFSHORE.

Diversification Opportunities for MOVIE GAMES and BW OFFSHORE

0.62

Correlation Coefficient

MOVIE GAMES  BW OFFSHORE

Poor diversification

The 3 months correlation between MOVIE and XY81 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and BW OFFSHORE go up and down completely randomly.

Pair Corralation between MOVIE GAMES and BW OFFSHORE

Assuming the 90 days horizon MOVIE GAMES is expected to generate 1.68 times less return on investment than BW OFFSHORE. In addition to that, MOVIE GAMES is 1.42 times more volatile than BW OFFSHORE LTD. It trades about 0.04 of its total potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.1 per unit of volatility. If you would invest  233.00  in BW OFFSHORE LTD on December 29, 2024 and sell it today you would earn a total of  30.00  from holding BW OFFSHORE LTD or generate 12.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MOVIE GAMES SA  vs.  BW OFFSHORE LTD

MOVIE GAMES SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOVIE GAMES may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BW OFFSHORE LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BW OFFSHORE LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BW OFFSHORE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOVIE GAMES and BW OFFSHORE

The main advantage of trading using opposite MOVIE GAMES and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, BW 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.

The idea behind MOVIE GAMES SA and BW OFFSHORE LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.