Correlation Between Bomesc Offshore and Southern PublishingMedia

Can any of the company-specific risk be diversified away by investing in both Bomesc Offshore and Southern PublishingMedia 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 Bomesc Offshore and Southern PublishingMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bomesc Offshore Engineering and Southern PublishingMedia Co, you can compare the effects of market volatilities on Bomesc Offshore and Southern PublishingMedia 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 Bomesc Offshore with a short position of Southern PublishingMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bomesc Offshore and Southern PublishingMedia.

Diversification Opportunities for Bomesc Offshore and Southern PublishingMedia

0.17

Correlation Coefficient

Bomesc Offshore  Southern PublishingMedia

Average diversification

The 3 months correlation between Bomesc and Southern is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bomesc Offshore Engineering and Southern PublishingMedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern PublishingMedia and Bomesc 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 Bomesc Offshore Engineering are associated (or correlated) with Southern PublishingMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern PublishingMedia has no effect on the direction of Bomesc Offshore i.e., Bomesc Offshore and Southern PublishingMedia go up and down completely randomly.

Pair Corralation between Bomesc Offshore and Southern PublishingMedia

Assuming the 90 days trading horizon Bomesc Offshore Engineering is expected to generate 1.03 times more return on investment than Southern PublishingMedia. However, Bomesc Offshore is 1.03 times more volatile than Southern PublishingMedia Co. It trades about 0.25 of its potential returns per unit of risk. Southern PublishingMedia Co is currently generating about 0.03 per unit of risk. If you would invest  1,150  in Bomesc Offshore Engineering on December 26, 2024 and sell it today you would earn a total of  343.00  from holding Bomesc Offshore Engineering or generate 29.83% return on investment over 90 days.

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

Bomesc Offshore Engineering  vs.  Southern PublishingMedia Co

Bomesc Offshore Engi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bomesc Offshore Engineering are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bomesc Offshore sustained solid returns over the last few months and may actually be approaching a breakup point.

Southern PublishingMedia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Southern PublishingMedia Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Southern PublishingMedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bomesc Offshore and Southern PublishingMedia

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

The idea behind Bomesc Offshore Engineering and Southern PublishingMedia Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.