Correlation Between Aker BP and Vera Bradley
Can any of the company-specific risk be diversified away by investing in both Aker BP and Vera Bradley 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 Aker BP and Vera Bradley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker BP ASA and Vera Bradley, you can compare the effects of market volatilities on Aker BP and Vera Bradley 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 Aker BP with a short position of Vera Bradley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker BP and Vera Bradley.
Diversification Opportunities for Aker BP and Vera Bradley
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aker and Vera is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aker BP ASA and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley and Aker BP 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 Aker BP ASA are associated (or correlated) with Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of Aker BP i.e., Aker BP and Vera Bradley go up and down completely randomly.
Pair Corralation between Aker BP and Vera Bradley
Assuming the 90 days horizon Aker BP ASA is expected to generate 1.19 times more return on investment than Vera Bradley. However, Aker BP is 1.19 times more volatile than Vera Bradley. It trades about 0.01 of its potential returns per unit of risk. Vera Bradley is currently generating about -0.02 per unit of risk. If you would invest 1,257 in Aker BP ASA on October 7, 2024 and sell it today you would lose (202.00) from holding Aker BP ASA or give up 16.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Aker BP ASA vs. Vera Bradley
Performance |
| Timeline |
| Aker BP ASA |
| Vera Bradley |
Aker BP and Vera Bradley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker BP and Vera Bradley
The main advantage of trading using opposite Aker BP and Vera Bradley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker BP position performs unexpectedly, Vera Bradley 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 Vera Bradley will offset losses from the drop in Vera Bradley's long position.| Aker BP vs. XCPCNL Business Services | Aker BP vs. International Consolidated Companies | Aker BP vs. Mills Music Trust | Aker BP vs. Citrine Global Corp |
| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Wolverine World Wide | Vera Bradley vs. Caleres |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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