Correlation Between Bomesc Offshore and Puya Semiconductor

Can any of the company-specific risk be diversified away by investing in both Bomesc Offshore and Puya Semiconductor 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 Puya Semiconductor 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 Puya Semiconductor Shanghai, you can compare the effects of market volatilities on Bomesc Offshore and Puya Semiconductor 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 Puya Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bomesc Offshore and Puya Semiconductor.

Diversification Opportunities for Bomesc Offshore and Puya Semiconductor

-0.18

Correlation Coefficient

Bomesc Offshore  Puya Semiconductor

Good diversification

The 3 months correlation between Bomesc and Puya is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bomesc Offshore Engineering and Puya Semiconductor Shanghai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puya Semiconductor 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 Puya Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puya Semiconductor has no effect on the direction of Bomesc Offshore i.e., Bomesc Offshore and Puya Semiconductor go up and down completely randomly.

Pair Corralation between Bomesc Offshore and Puya Semiconductor

Assuming the 90 days trading horizon Bomesc Offshore is expected to generate 40.27 times less return on investment than Puya Semiconductor. But when comparing it to its historical volatility, Bomesc Offshore Engineering is 2.84 times less risky than Puya Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Puya Semiconductor Shanghai is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  8,988  in Puya Semiconductor Shanghai on October 25, 2024 and sell it today you would earn a total of  3,064  from holding Puya Semiconductor Shanghai or generate 34.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bomesc Offshore Engineering  vs.  Puya Semiconductor Shanghai

Bomesc Offshore Engi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bomesc Offshore Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bomesc Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Puya Semiconductor

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Puya Semiconductor Shanghai are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Puya Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bomesc Offshore and Puya Semiconductor

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

The idea behind Bomesc Offshore Engineering and Puya Semiconductor Shanghai 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.