Correlation Between Getty Images and BW LPG
Can any of the company-specific risk be diversified away by investing in both Getty Images and BW LPG 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 Getty Images and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and BW LPG Limited, you can compare the effects of market volatilities on Getty Images and BW LPG 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 Getty Images with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and BW LPG.
Diversification Opportunities for Getty Images and BW LPG
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Getty and BWLP is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited and Getty Images 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 Getty Images Holdings are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Getty Images i.e., Getty Images and BW LPG go up and down completely randomly.
Pair Corralation between Getty Images and BW LPG
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the BW LPG. In addition to that, Getty Images is 1.44 times more volatile than BW LPG Limited. It trades about -0.08 of its total potential returns per unit of risk. BW LPG Limited is currently generating about -0.09 per unit of volatility. If you would invest 1,421 in BW LPG Limited on September 12, 2024 and sell it today you would lose (225.00) from holding BW LPG Limited or give up 15.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Getty Images Holdings vs. BW LPG Limited
Performance |
Timeline |
Getty Images Holdings |
BW LPG Limited |
Getty Images and BW LPG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Getty Images and BW LPG
The main advantage of trading using opposite Getty Images and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, BW LPG 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 LPG will offset losses from the drop in BW LPG's long position.Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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