Correlation Between BP PLC and Vivakor
Can any of the company-specific risk be diversified away by investing in both BP PLC and Vivakor 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 Vivakor 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 Vivakor, you can compare the effects of market volatilities on BP PLC and Vivakor 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 Vivakor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and Vivakor.
Diversification Opportunities for BP PLC and Vivakor
Weak diversification
The 3 months correlation between BP PLC and Vivakor is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC ADR and Vivakor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivakor 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 Vivakor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivakor has no effect on the direction of BP PLC i.e., BP PLC and Vivakor go up and down completely randomly.
Pair Corralation between BP PLC and Vivakor
Allowing for the 90-day total investment horizon BP PLC ADR is expected to under-perform the Vivakor. But the stock apears to be less risky and, when comparing its historical volatility, BP PLC ADR is 5.17 times less risky than Vivakor. The stock trades about -0.02 of its potential returns per unit of risk. The Vivakor is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Vivakor on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Vivakor or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP PLC ADR vs. Vivakor
Performance |
| Timeline |
| BP PLC ADR |
| Vivakor |
BP PLC and Vivakor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP PLC and Vivakor
The main advantage of trading using opposite BP PLC and Vivakor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC position performs unexpectedly, Vivakor 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 Vivakor will offset losses from the drop in Vivakor's long position.| BP PLC vs. RLJ Lodging Trust | BP PLC vs. Aquagold International | BP PLC vs. Stepstone Group | BP PLC vs. Morningstar Unconstrained Allocation |
| Vivakor vs. Houston American Energy | Vivakor vs. Barnwell Industries | Vivakor vs. Mexco Energy | Vivakor vs. PHX Minerals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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