Correlation Between BKV and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both BKV and Dream Industrial 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 BKV and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKV Corporation and Dream Industrial Real, you can compare the effects of market volatilities on BKV and Dream Industrial 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 BKV with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and Dream Industrial.
Diversification Opportunities for BKV and Dream Industrial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKV and Dream is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and BKV 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 BKV Corporation are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of BKV i.e., BKV and Dream Industrial go up and down completely randomly.
Pair Corralation between BKV and Dream Industrial
Considering the 90-day investment horizon BKV Corporation is expected to generate 1.42 times more return on investment than Dream Industrial. However, BKV is 1.42 times more volatile than Dream Industrial Real. It trades about 0.03 of its potential returns per unit of risk. Dream Industrial Real is currently generating about -0.4 per unit of risk. If you would invest 2,154 in BKV Corporation on September 22, 2024 and sell it today you would earn a total of 15.00 from holding BKV Corporation or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKV Corp. vs. Dream Industrial Real
Performance |
| Timeline |
| BKV Corporation |
| Dream Industrial Real |
BKV and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKV and Dream Industrial
The main advantage of trading using opposite BKV and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKV position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| BKV vs. Antero Resources Corp | BKV vs. Empire Petroleum Corp | BKV vs. Permian Resources | BKV vs. SandRidge Energy |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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