Correlation Between Gruppo MutuiOnline and BW Offshore

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

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

Diversification Opportunities for Gruppo MutuiOnline and BW Offshore

-0.09

Correlation Coefficient

Gruppo MutuiOnline  BW Offshore

Good diversification

The 3 months correlation between Gruppo and 0RKH is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo MutuiOnline SpA and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA 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 Gruppo MutuiOnline i.e., Gruppo MutuiOnline and BW Offshore go up and down completely randomly.

Pair Corralation between Gruppo MutuiOnline and BW Offshore

Assuming the 90 days trading horizon Gruppo MutuiOnline SpA is expected to generate 1.35 times more return on investment than BW Offshore. However, Gruppo MutuiOnline is 1.35 times more volatile than BW Offshore. It trades about 0.19 of its potential returns per unit of risk. BW Offshore is currently generating about 0.04 per unit of risk. If you would invest  3,335  in Gruppo MutuiOnline SpA on September 17, 2024 and sell it today you would earn a total of  625.00  from holding Gruppo MutuiOnline SpA or generate 18.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	44.62%
Values	Daily Returns

Gruppo MutuiOnline SpA  vs.  BW Offshore

Gruppo MutuiOnline SpA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo MutuiOnline SpA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gruppo MutuiOnline unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain basic indicators, BW Offshore may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gruppo MutuiOnline and BW Offshore

The main advantage of trading using opposite Gruppo MutuiOnline and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.