Correlation Between BP Prudhoe and Owens Minor
Can any of the company-specific risk be diversified away by investing in both BP Prudhoe and Owens Minor 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 BP Prudhoe and Owens Minor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP Prudhoe Bay and Owens Minor, you can compare the effects of market volatilities on BP Prudhoe and Owens Minor 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 BP Prudhoe with a short position of Owens Minor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Prudhoe and Owens Minor.
Diversification Opportunities for BP Prudhoe and Owens Minor
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BMI and Owens is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BP Prudhoe Bay and Owens Minor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Minor and BP Prudhoe 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 BP Prudhoe Bay are associated (or correlated) with Owens Minor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Minor has no effect on the direction of BP Prudhoe i.e., BP Prudhoe and Owens Minor go up and down completely randomly.
Pair Corralation between BP Prudhoe and Owens Minor
Assuming the 90 days horizon BP Prudhoe Bay is expected to under-perform the Owens Minor. In addition to that, BP Prudhoe is 3.7 times more volatile than Owens Minor. It trades about -0.09 of its total potential returns per unit of risk. Owens Minor is currently generating about 0.27 per unit of volatility. If you would invest 1,220 in Owens Minor on November 4, 2024 and sell it today you would earn a total of 180.00 from holding Owens Minor or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP Prudhoe Bay vs. Owens Minor
Performance |
| Timeline |
| BP Prudhoe Bay |
| Owens Minor |
BP Prudhoe and Owens Minor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Prudhoe and Owens Minor
The main advantage of trading using opposite BP Prudhoe and Owens Minor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Prudhoe position performs unexpectedly, Owens Minor 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 Owens Minor will offset losses from the drop in Owens Minor's long position.| BP Prudhoe vs. ADRIATIC METALS LS 013355 | BP Prudhoe vs. Planet Fitness | BP Prudhoe vs. PARKEN Sport Entertainment | BP Prudhoe vs. OPKO HEALTH |
| Owens Minor vs. SCIENCE IN SPORT | Owens Minor vs. Fukuyama Transporting Co | Owens Minor vs. Air Transport Services | Owens Minor vs. SALESFORCE INC CDR |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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