Correlation Between BP PLC and Bedford Energy
Can any of the company-specific risk be diversified away by investing in both BP PLC and Bedford Energy 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 PLC and Bedford Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP PLC ADR and Bedford Energy, you can compare the effects of market volatilities on BP PLC and Bedford Energy 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 PLC with a short position of Bedford Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and Bedford Energy.
Diversification Opportunities for BP PLC and Bedford Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BP PLC and Bedford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC ADR and Bedford Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bedford Energy and BP PLC 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 PLC ADR are associated (or correlated) with Bedford Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bedford Energy has no effect on the direction of BP PLC i.e., BP PLC and Bedford Energy go up and down completely randomly.
Pair Corralation between BP PLC and Bedford Energy
If you would invest 2,926 in BP PLC ADR on November 2, 2024 and sell it today you would earn a total of 187.00 from holding BP PLC ADR or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 93.65% |
| Values | Daily Returns |
BP PLC ADR vs. Bedford Energy
Performance |
| Timeline |
| BP PLC ADR |
| Bedford Energy |
BP PLC and Bedford Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP PLC and Bedford Energy
The main advantage of trading using opposite BP PLC and Bedford Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC position performs unexpectedly, Bedford Energy 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 Bedford Energy will offset losses from the drop in Bedford Energy's long position.| BP PLC vs. TotalEnergies SE ADR | BP PLC vs. Chevron Corp | BP PLC vs. Exxon Mobil Corp | BP PLC vs. Equinor ASA ADR |
| Bedford Energy vs. Equinor ASA ADR | Bedford Energy vs. TotalEnergies SE ADR | Bedford Energy vs. Ecopetrol SA ADR | Bedford Energy vs. National Fuel Gas |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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