Correlation Between BW Offshore and CMDKF

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

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

Diversification Opportunities for BW Offshore and CMDKF

0.0

Correlation Coefficient

BW Offshore  CMDKF

Pay attention - limited upside

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

Pair Corralation between BW Offshore and CMDKF

If you would invest  22.00  in CMDKF on December 20, 2024 and sell it today you would earn a total of  0.00  from holding CMDKF or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

BW Offshore Limited  vs.  CMDKF

BW Offshore Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days BW Offshore Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BW Offshore is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CMDKF

Risk-Adjusted Performance

Very Weak

Over the last 90 days CMDKF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, CMDKF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BW Offshore and CMDKF

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

The idea behind BW Offshore Limited and CMDKF 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..