Correlation Between WT Offshore and BCB Bancorp

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

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

Diversification Opportunities for WT Offshore and BCB Bancorp

-0.51

Correlation Coefficient

WT Offshore  BCB Bancorp

Excellent diversification

The 3 months correlation between WTI and BCB is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding WT Offshore and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and WT Offshore 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 WT Offshore are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of WT Offshore i.e., WT Offshore and BCB Bancorp go up and down completely randomly.

Pair Corralation between WT Offshore and BCB Bancorp

Considering the 90-day investment horizon WT Offshore is expected to under-perform the BCB Bancorp. In addition to that, WT Offshore is 1.85 times more volatile than BCB Bancorp. It trades about 0.0 of its total potential returns per unit of risk. BCB Bancorp is currently generating about 0.06 per unit of volatility. If you would invest  1,182  in BCB Bancorp on September 12, 2024 and sell it today you would earn a total of  81.00  from holding BCB Bancorp or generate 6.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WT Offshore  vs.  BCB Bancorp

WT Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WT Offshore is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

BCB Bancorp

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BCB Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental drivers, BCB Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with WT Offshore and BCB Bancorp

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

The idea behind WT Offshore and BCB Bancorp 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.