Correlation Between BPI Energy and Imperial Res
Can any of the company-specific risk be diversified away by investing in both BPI Energy and Imperial Res 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 Imperial Res 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 Imperial Res, you can compare the effects of market volatilities on BPI Energy and Imperial Res 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 Imperial Res. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPI Energy and Imperial Res.
Diversification Opportunities for BPI Energy and Imperial Res
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BPI and Imperial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BPI Energy Holdings and Imperial Res in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Res 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 Imperial Res. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Res has no effect on the direction of BPI Energy i.e., BPI Energy and Imperial Res go up and down completely randomly.
Pair Corralation between BPI Energy and Imperial Res
If you would invest 0.03 in Imperial Res on August 24, 2024 and sell it today you would lose (0.01) from holding Imperial Res or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
BPI Energy Holdings vs. Imperial Res
Performance |
| Timeline |
| BPI Energy Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Imperial Res |
BPI Energy and Imperial Res Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPI Energy and Imperial Res
The main advantage of trading using opposite BPI Energy and Imperial Res positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPI Energy position performs unexpectedly, Imperial Res 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 Imperial Res will offset losses from the drop in Imperial Res' long position.The idea behind BPI Energy Holdings and Imperial Res 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.| Imperial Res vs. Permian Resources | Imperial Res vs. Devon Energy | Imperial Res vs. EOG Resources | Imperial Res vs. Coterra 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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