Correlation Between Beowulf Mining and Flex LNG

Can any of the company-specific risk be diversified away by investing in both Beowulf Mining and Flex LNG 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 Beowulf Mining and Flex LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beowulf Mining PLC and Flex LNG, you can compare the effects of market volatilities on Beowulf Mining and Flex LNG 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 Beowulf Mining with a short position of Flex LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and Flex LNG.

Diversification Opportunities for Beowulf Mining and Flex LNG

0.0

Correlation Coefficient

Beowulf Mining  Flex LNG

Pay attention - limited upside

The 3 months correlation between Beowulf and Flex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining PLC and Flex LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex LNG and Beowulf Mining 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 Beowulf Mining PLC are associated (or correlated) with Flex LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex LNG has no effect on the direction of Beowulf Mining i.e., Beowulf Mining and Flex LNG go up and down completely randomly.

Pair Corralation between Beowulf Mining and Flex LNG

If you would invest  206.00  in Beowulf Mining PLC on December 3, 2024 and sell it today you would earn a total of  183.00  from holding Beowulf Mining PLC or generate 88.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Beowulf Mining PLC  vs.  Flex LNG

Beowulf Mining PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beowulf Mining PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Beowulf Mining sustained solid returns over the last few months and may actually be approaching a breakup point.

Flex LNG

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Beowulf Mining and Flex LNG

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

The idea behind Beowulf Mining PLC and Flex LNG 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.