Correlation Between 88 Energy and BNK Banking
Can any of the company-specific risk be diversified away by investing in both 88 Energy and BNK Banking 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 88 Energy and BNK Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and BNK Banking, you can compare the effects of market volatilities on 88 Energy and BNK Banking 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 88 Energy with a short position of BNK Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and BNK Banking.
Diversification Opportunities for 88 Energy and BNK Banking
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 88E and BNK is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and BNK Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Banking and 88 Energy 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 88 Energy are associated (or correlated) with BNK Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Banking has no effect on the direction of 88 Energy i.e., 88 Energy and BNK Banking go up and down completely randomly.
Pair Corralation between 88 Energy and BNK Banking
Assuming the 90 days trading horizon 88 Energy is expected to generate 14.1 times more return on investment than BNK Banking. However, 88 Energy is 14.1 times more volatile than BNK Banking. It trades about 0.17 of its potential returns per unit of risk. BNK Banking is currently generating about 0.01 per unit of risk. If you would invest 0.20 in 88 Energy on November 3, 2024 and sell it today you would earn a total of 0.00 from holding 88 Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
88 Energy vs. BNK Banking
Performance |
| Timeline |
| 88 Energy |
| BNK Banking |
88 Energy and BNK Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and BNK Banking
The main advantage of trading using opposite 88 Energy and BNK Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, BNK Banking 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 BNK Banking will offset losses from the drop in BNK Banking's long position.| 88 Energy vs. Regis Healthcare | 88 Energy vs. Sonic Healthcare | 88 Energy vs. Austco Healthcare | 88 Energy vs. Bank of Queensland |
| BNK Banking vs. Diversified United Investment | BNK Banking vs. Microequities Asset Management | BNK Banking vs. Duketon Mining | BNK Banking vs. Charter Hall Retail |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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