Correlation Between Symphony Environmental and BW Offshore

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

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

Diversification Opportunities for Symphony Environmental and BW Offshore

0.38

Correlation Coefficient

Symphony Environmental  BW Offshore

Weak diversification

The 3 months correlation between Symphony and 0RKH is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and BW Offshore go up and down completely randomly.

Pair Corralation between Symphony Environmental and BW Offshore

Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to under-perform the BW Offshore. In addition to that, Symphony Environmental is 1.94 times more volatile than BW Offshore. It trades about -0.02 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.05 per unit of volatility. If you would invest  2,025  in BW Offshore on October 9, 2024 and sell it today you would earn a total of  1,113  from holding BW Offshore or generate 54.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.83%
Values	Daily Returns

Symphony Environmental Technol  vs.  BW Offshore

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

BW Offshore

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BW Offshore are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BW Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Symphony Environmental and BW Offshore

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

The idea behind Symphony Environmental Technologies and BW Offshore 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.