Correlation Between Bread Financial and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Bread Financial and ConocoPhillips 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 Bread Financial and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and ConocoPhillips, you can compare the effects of market volatilities on Bread Financial and ConocoPhillips 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 Bread Financial with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and ConocoPhillips.
Diversification Opportunities for Bread Financial and ConocoPhillips
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bread and ConocoPhillips is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Bread Financial i.e., Bread Financial and ConocoPhillips go up and down completely randomly.
Pair Corralation between Bread Financial and ConocoPhillips
Assuming the 90 days trading horizon Bread Financial is expected to generate 1.9 times less return on investment than ConocoPhillips. In addition to that, Bread Financial is 1.81 times more volatile than ConocoPhillips. It trades about 0.01 of its total potential returns per unit of risk. ConocoPhillips is currently generating about 0.03 per unit of volatility. If you would invest 5,011 in ConocoPhillips on October 29, 2024 and sell it today you would earn a total of 44.00 from holding ConocoPhillips or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. ConocoPhillips
Performance |
| Timeline |
| Bread Financial Holdings |
| ConocoPhillips |
Bread Financial and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and ConocoPhillips
The main advantage of trading using opposite Bread Financial and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Bread Financial vs. Melco Resorts Entertainment | Bread Financial vs. Nordon Indstrias Metalrgicas | Bread Financial vs. Brpr Corporate Offices | Bread Financial vs. Live Nation Entertainment, |
| ConocoPhillips vs. Fidelity National Information | ConocoPhillips vs. Global X Funds | ConocoPhillips vs. Caesars Entertainment, | ConocoPhillips vs. Hormel Foods |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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