Correlation Between BPI Energy and Coastal Caribbean
Can any of the company-specific risk be diversified away by investing in both BPI Energy and Coastal Caribbean 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 BPI Energy and Coastal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BPI Energy Holdings and Coastal Caribbean Oils, you can compare the effects of market volatilities on BPI Energy and Coastal Caribbean 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 BPI Energy with a short position of Coastal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPI Energy and Coastal Caribbean.
Diversification Opportunities for BPI Energy and Coastal Caribbean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BPI and Coastal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BPI Energy Holdings and Coastal Caribbean Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Caribbean Oils and BPI 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 BPI Energy Holdings are associated (or correlated) with Coastal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Caribbean Oils has no effect on the direction of BPI Energy i.e., BPI Energy and Coastal Caribbean go up and down completely randomly.
Pair Corralation between BPI Energy and Coastal Caribbean
If you would invest 0.00 in Coastal Caribbean Oils on August 28, 2024 and sell it today you would earn a total of 0.01 from holding Coastal Caribbean Oils or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 17.65% |
| Values | Daily Returns |
BPI Energy Holdings vs. Coastal Caribbean Oils
Performance |
| Timeline |
| BPI Energy Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BPI Energy and Coastal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPI Energy and Coastal Caribbean
The main advantage of trading using opposite BPI Energy and Coastal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPI Energy position performs unexpectedly, Coastal Caribbean 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 Coastal Caribbean will offset losses from the drop in Coastal Caribbean's long position.The idea behind BPI Energy Holdings and Coastal Caribbean Oils pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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