Correlation Between BPI Energy and Zion Oil
Can any of the company-specific risk be diversified away by investing in both BPI Energy and Zion Oil 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 Zion Oil 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 Zion Oil Gas, you can compare the effects of market volatilities on BPI Energy and Zion Oil 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 Zion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPI Energy and Zion Oil.
Diversification Opportunities for BPI Energy and Zion Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BPI and Zion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BPI Energy Holdings and Zion Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zion Oil Gas 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 Zion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zion Oil Gas has no effect on the direction of BPI Energy i.e., BPI Energy and Zion Oil go up and down completely randomly.
Pair Corralation between BPI Energy and Zion Oil
If you would invest 6.85 in Zion Oil Gas on September 16, 2024 and sell it today you would earn a total of 0.00 from holding Zion Oil Gas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BPI Energy Holdings vs. Zion Oil Gas
Performance |
| Timeline |
| BPI Energy Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zion Oil Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BPI Energy and Zion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPI Energy and Zion Oil
The main advantage of trading using opposite BPI Energy and Zion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPI Energy position performs unexpectedly, Zion Oil 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 Zion Oil will offset losses from the drop in Zion Oil's long position.The idea behind BPI Energy Holdings and Zion Oil Gas 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.| Zion Oil vs. 88 Energy Limited | Zion Oil vs. MDM Permian | Zion Oil vs. Foothills Exploration | Zion Oil vs. Brixton Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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