Correlation Between PLAYMATES TOYS and BW OFFSHORE

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

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

Diversification Opportunities for PLAYMATES TOYS and BW OFFSHORE

0.49

Correlation Coefficient

PLAYMATES TOYS  BW OFFSHORE

Very weak diversification

The 3 months correlation between PLAYMATES and XY81 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS i.e., PLAYMATES TOYS and BW OFFSHORE go up and down completely randomly.

Pair Corralation between PLAYMATES TOYS and BW OFFSHORE

Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the BW OFFSHORE. In addition to that, PLAYMATES TOYS is 1.37 times more volatile than BW OFFSHORE LTD. It trades about 0.0 of its total potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.03 per unit of volatility. If you would invest  259.00  in BW OFFSHORE LTD on October 10, 2024 and sell it today you would earn a total of  9.00  from holding BW OFFSHORE LTD or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

PLAYMATES TOYS  vs.  BW OFFSHORE LTD

PLAYMATES TOYS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLAYMATES TOYS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PLAYMATES TOYS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BW OFFSHORE LTD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BW OFFSHORE LTD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BW OFFSHORE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PLAYMATES TOYS and BW OFFSHORE

The main advantage of trading using opposite PLAYMATES TOYS and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS 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 PLAYMATES TOYS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.