Correlation Between AXP Energy and BEST
Can any of the company-specific risk be diversified away by investing in both AXP Energy and BEST 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 AXP Energy and BEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXP Energy and BEST Inc, you can compare the effects of market volatilities on AXP Energy and BEST 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 AXP Energy with a short position of BEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXP Energy and BEST.
Diversification Opportunities for AXP Energy and BEST
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AXP and BEST is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AXP Energy and BEST Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEST Inc and AXP 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 AXP Energy are associated (or correlated) with BEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEST Inc has no effect on the direction of AXP Energy i.e., AXP Energy and BEST go up and down completely randomly.
Pair Corralation between AXP Energy and BEST
Assuming the 90 days horizon AXP Energy is expected to generate 31.43 times more return on investment than BEST. However, AXP Energy is 31.43 times more volatile than BEST Inc. It trades about 0.14 of its potential returns per unit of risk. BEST Inc is currently generating about -0.3 per unit of risk. If you would invest 0.08 in AXP Energy on August 24, 2024 and sell it today you would earn a total of 0.02 from holding AXP Energy or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXP Energy vs. BEST Inc
Performance |
| Timeline |
| AXP Energy |
| BEST Inc |
AXP Energy and BEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXP Energy and BEST
The main advantage of trading using opposite AXP Energy and BEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXP Energy position performs unexpectedly, BEST 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 BEST will offset losses from the drop in BEST's long position.| AXP Energy vs. ADX Energy | AXP Energy vs. Calima Energy Limited | AXP Energy vs. Barrister Energy LLC | AXP Energy vs. AER Energy Resources |
| BEST vs. Heartland Express | BEST vs. Universal Logistics Holdings | BEST vs. Marten Transport | BEST vs. Werner Enterprises |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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