Correlation Between Athelney Trust and BP Plc
Can any of the company-specific risk be diversified away by investing in both Athelney Trust and BP Plc 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 Athelney Trust and BP Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athelney Trust plc and BP plc, you can compare the effects of market volatilities on Athelney Trust and BP Plc 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 Athelney Trust with a short position of BP Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athelney Trust and BP Plc.
Diversification Opportunities for Athelney Trust and BP Plc
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Athelney and BP-A is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Athelney Trust plc and BP plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP plc and Athelney Trust 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 Athelney Trust plc are associated (or correlated) with BP Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP plc has no effect on the direction of Athelney Trust i.e., Athelney Trust and BP Plc go up and down completely randomly.
Pair Corralation between Athelney Trust and BP Plc
Assuming the 90 days trading horizon Athelney Trust plc is expected to generate 0.7 times more return on investment than BP Plc. However, Athelney Trust plc is 1.43 times less risky than BP Plc. It trades about 0.0 of its potential returns per unit of risk. BP plc is currently generating about -0.03 per unit of risk. If you would invest 19,181 in Athelney Trust plc on November 2, 2024 and sell it today you would lose (681.00) from holding Athelney Trust plc or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Athelney Trust plc vs. BP plc
Performance |
| Timeline |
| Athelney Trust plc |
| BP plc |
Athelney Trust and BP Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athelney Trust and BP Plc
The main advantage of trading using opposite Athelney Trust and BP Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athelney Trust position performs unexpectedly, BP Plc 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 BP Plc will offset losses from the drop in BP Plc's long position.| Athelney Trust vs. Applied Materials | Athelney Trust vs. Bloomsbury Publishing Plc | Athelney Trust vs. SBM Offshore NV | Athelney Trust vs. European Metals Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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