Correlation Between Socket Mobile and BW LPG
Can any of the company-specific risk be diversified away by investing in both Socket Mobile 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 Socket Mobile and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socket Mobile and BW LPG Limited, you can compare the effects of market volatilities on Socket Mobile 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 Socket Mobile with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socket Mobile and BW LPG.
Diversification Opportunities for Socket Mobile and BW LPG
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Socket and BWLP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Socket Mobile 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 Socket Mobile 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 Socket Mobile 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 Socket Mobile i.e., Socket Mobile and BW LPG go up and down completely randomly.
Pair Corralation between Socket Mobile and BW LPG
Given the investment horizon of 90 days Socket Mobile is expected to under-perform the BW LPG. In addition to that, Socket Mobile is 1.32 times more volatile than BW LPG Limited. It trades about -0.03 of its total potential returns per unit of risk. BW LPG Limited is currently generating about -0.02 per unit of volatility. If you would invest 1,198 in BW LPG Limited on December 2, 2024 and sell it today you would lose (64.00) from holding BW LPG Limited or give up 5.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Socket Mobile vs. BW LPG Limited
Performance |
Timeline |
Socket Mobile |
BW LPG Limited |
Socket Mobile and BW LPG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Socket Mobile and BW LPG
The main advantage of trading using opposite Socket Mobile and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socket Mobile 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.Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group Holdings |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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