Correlation Between Beeks Trading and BW Offshore

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

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

Diversification Opportunities for Beeks Trading and BW Offshore

-0.41

Correlation Coefficient

Beeks Trading  BW Offshore

Very good diversification

The 3 months correlation between Beeks and 0RKH is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Beeks Trading 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 Beeks Trading 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 has no effect on the direction of Beeks Trading i.e., Beeks Trading and BW Offshore go up and down completely randomly.

Pair Corralation between Beeks Trading and BW Offshore

Assuming the 90 days trading horizon Beeks Trading is expected to generate 5.52 times less return on investment than BW Offshore. In addition to that, Beeks Trading is 1.31 times more volatile than BW Offshore. It trades about 0.05 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.39 per unit of volatility. If you would invest  2,743  in BW Offshore on October 6, 2024 and sell it today you would earn a total of  430.00  from holding BW Offshore or generate 15.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Beeks Trading  vs.  BW Offshore

Beeks Trading

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Beeks Trading may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BW Offshore

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BW Offshore are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BW Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Beeks Trading and BW Offshore

The main advantage of trading using opposite Beeks Trading and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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 Beeks Trading and BW Offshore 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.