Correlation Between Cadeler AS and Bowman Consulting

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

By analyzing existing cross correlation between Cadeler AS and Bowman Consulting Group, you can compare the effects of market volatilities on Cadeler AS and Bowman Consulting 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 Cadeler AS with a short position of Bowman Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler AS and Bowman Consulting.

Diversification Opportunities for Cadeler AS and Bowman Consulting

0.82

Correlation Coefficient

Cadeler AS  Bowman Consulting

Very poor diversification

The 3 months correlation between Cadeler and Bowman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler AS and Bowman Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowman Consulting and Cadeler AS 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 Cadeler AS are associated (or correlated) with Bowman Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowman Consulting has no effect on the direction of Cadeler AS i.e., Cadeler AS and Bowman Consulting go up and down completely randomly.

Pair Corralation between Cadeler AS and Bowman Consulting

Given the investment horizon of 90 days Cadeler AS is expected to under-perform the Bowman Consulting. But the stock apears to be less risky and, when comparing its historical volatility, Cadeler AS is 1.37 times less risky than Bowman Consulting. The stock trades about -0.28 of its potential returns per unit of risk. The Bowman Consulting Group is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  2,739  in Bowman Consulting Group on November 29, 2024 and sell it today you would lose (614.00) from holding Bowman Consulting Group or give up 22.42% of portfolio value over 90 days.

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

Cadeler AS  vs.  Bowman Consulting Group

Cadeler AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Bowman Consulting

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowman Consulting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cadeler AS and Bowman Consulting

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

The idea behind Cadeler AS and Bowman Consulting Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.