Correlation Between ChampionX and Bristow

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

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

Diversification Opportunities for ChampionX and Bristow

0.74

Correlation Coefficient

ChampionX  Bristow

Poor diversification

The 3 months correlation between ChampionX and Bristow is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group and ChampionX 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 ChampionX are associated (or correlated) with Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of ChampionX i.e., ChampionX and Bristow go up and down completely randomly.

Pair Corralation between ChampionX and Bristow

Considering the 90-day investment horizon ChampionX is expected to generate 1.06 times more return on investment than Bristow. However, ChampionX is 1.06 times more volatile than Bristow Group. It trades about -0.03 of its potential returns per unit of risk. Bristow Group is currently generating about -0.06 per unit of risk. If you would invest  3,084  in ChampionX on November 28, 2024 and sell it today you would lose (130.00) from holding ChampionX or give up 4.22% of portfolio value over 90 days.

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

ChampionX  vs.  Bristow Group

ChampionX

Risk-Adjusted Performance

Very Weak

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

Bristow Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bristow Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with ChampionX and Bristow

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

The idea behind ChampionX and Bristow 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.