Correlation Between Bengal Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Bengal Energy and Kelt Exploration 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 Bengal Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bengal Energy and Kelt Exploration, you can compare the effects of market volatilities on Bengal Energy and Kelt Exploration 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 Bengal Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bengal Energy and Kelt Exploration.
Diversification Opportunities for Bengal Energy and Kelt Exploration
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bengal and Kelt is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bengal Energy and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Bengal 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 Bengal Energy are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Bengal Energy i.e., Bengal Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Bengal Energy and Kelt Exploration
Assuming the 90 days horizon Bengal Energy is expected to generate 2.47 times less return on investment than Kelt Exploration. In addition to that, Bengal Energy is 4.28 times more volatile than Kelt Exploration. It trades about 0.04 of its total potential returns per unit of risk. Kelt Exploration is currently generating about 0.44 per unit of volatility. If you would invest 437.00 in Kelt Exploration on October 23, 2024 and sell it today you would earn a total of 81.00 from holding Kelt Exploration or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bengal Energy vs. Kelt Exploration
Performance |
| Timeline |
| Bengal Energy |
| Kelt Exploration |
Bengal Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bengal Energy and Kelt Exploration
The main advantage of trading using opposite Bengal Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bengal Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| Bengal Energy vs. Questerre Energy | Bengal Energy vs. Petrus Resources | Bengal Energy vs. PetroShale | Bengal Energy vs. Calima Energy Limited |
| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal Energy |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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