Correlation Between 2020 Bulkers and Aker BP
Can any of the company-specific risk be diversified away by investing in both 2020 Bulkers and Aker BP 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 2020 Bulkers and Aker BP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2020 Bulkers and Aker BP ASA, you can compare the effects of market volatilities on 2020 Bulkers and Aker BP 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 2020 Bulkers with a short position of Aker BP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2020 Bulkers and Aker BP.
Diversification Opportunities for 2020 Bulkers and Aker BP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 2020 and Aker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 2020 Bulkers and Aker BP ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker BP ASA and 2020 Bulkers 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 2020 Bulkers are associated (or correlated) with Aker BP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker BP ASA has no effect on the direction of 2020 Bulkers i.e., 2020 Bulkers and Aker BP go up and down completely randomly.
Pair Corralation between 2020 Bulkers and Aker BP
Assuming the 90 days trading horizon 2020 Bulkers is expected to under-perform the Aker BP. In addition to that, 2020 Bulkers is 1.19 times more volatile than Aker BP ASA. It trades about -0.06 of its total potential returns per unit of risk. Aker BP ASA is currently generating about -0.04 per unit of volatility. If you would invest 25,156 in Aker BP ASA on August 28, 2024 and sell it today you would lose (2,566) from holding Aker BP ASA or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2020 Bulkers vs. Aker BP ASA
Performance |
| Timeline |
| 2020 Bulkers |
| Aker BP ASA |
2020 Bulkers and Aker BP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2020 Bulkers and Aker BP
The main advantage of trading using opposite 2020 Bulkers and Aker BP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2020 Bulkers position performs unexpectedly, Aker BP 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 Aker BP will offset losses from the drop in Aker BP's long position.| 2020 Bulkers vs. Shelf Drilling | 2020 Bulkers vs. Solstad Offsho | 2020 Bulkers vs. Eidesvik Offshore ASA | 2020 Bulkers vs. Elkem ASA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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