Correlation Between Bisichi Mining and BP PLC
Can any of the company-specific risk be diversified away by investing in both Bisichi Mining 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 Bisichi Mining and BP PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bisichi Mining PLC and BP PLC, you can compare the effects of market volatilities on Bisichi Mining 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 Bisichi Mining with a short position of BP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisichi Mining and BP PLC.
Diversification Opportunities for Bisichi Mining and BP PLC
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bisichi and BP PLC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bisichi Mining PLC and BP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP PLC and Bisichi Mining 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 Bisichi Mining 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 Bisichi Mining i.e., Bisichi Mining and BP PLC go up and down completely randomly.
Pair Corralation between Bisichi Mining and BP PLC
Assuming the 90 days trading horizon Bisichi Mining PLC is expected to under-perform the BP PLC. In addition to that, Bisichi Mining is 1.82 times more volatile than BP PLC. It trades about -0.06 of its total potential returns per unit of risk. BP PLC is currently generating about -0.07 per unit of volatility. If you would invest 39,902 in BP PLC on August 28, 2024 and sell it today you would lose (1,117) from holding BP PLC or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bisichi Mining PLC vs. BP PLC
Performance |
| Timeline |
| Bisichi Mining PLC |
| BP PLC |
Bisichi Mining and BP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisichi Mining and BP PLC
The main advantage of trading using opposite Bisichi Mining and BP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisichi Mining 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.| Bisichi Mining vs. The Investment | Bisichi Mining vs. The Mercantile Investment | Bisichi Mining vs. Primorus Investments plc | Bisichi Mining vs. Aurora Investment Trust |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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