Correlation Between BP Prudhoe and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both BP Prudhoe and REVO INSURANCE 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 REVO INSURANCE 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 REVO INSURANCE SPA, you can compare the effects of market volatilities on BP Prudhoe and REVO INSURANCE 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Prudhoe and REVO INSURANCE.
Diversification Opportunities for BP Prudhoe and REVO INSURANCE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BMI and REVO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BP Prudhoe Bay and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of BP Prudhoe i.e., BP Prudhoe and REVO INSURANCE go up and down completely randomly.
Pair Corralation between BP Prudhoe and REVO INSURANCE
Assuming the 90 days horizon BP Prudhoe Bay is expected to under-perform the REVO INSURANCE. In addition to that, BP Prudhoe is 4.06 times more volatile than REVO INSURANCE SPA. It trades about -0.08 of its total potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.11 per unit of volatility. If you would invest 754.00 in REVO INSURANCE SPA on September 1, 2024 and sell it today you would earn a total of 326.00 from holding REVO INSURANCE SPA or generate 43.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
BP Prudhoe Bay vs. REVO INSURANCE SPA
Performance |
| Timeline |
| BP Prudhoe Bay |
| REVO INSURANCE SPA |
BP Prudhoe and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Prudhoe and REVO INSURANCE
The main advantage of trading using opposite BP Prudhoe and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Prudhoe position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| BP Prudhoe vs. Superior Plus Corp | BP Prudhoe vs. NMI Holdings | BP Prudhoe vs. Origin Agritech | BP Prudhoe vs. SIVERS SEMICONDUCTORS AB |
| REVO INSURANCE vs. The Travelers Companies | REVO INSURANCE vs. Allianz SE | REVO INSURANCE vs. Onxeo SA | REVO INSURANCE vs. Blue Sky Uranium |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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