Correlation Between BP Prudhoe and Aemetis
Can any of the company-specific risk be diversified away by investing in both BP Prudhoe and Aemetis 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 Prudhoe and Aemetis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP Prudhoe Bay and Aemetis, you can compare the effects of market volatilities on BP Prudhoe and Aemetis 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 Prudhoe with a short position of Aemetis. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Prudhoe and Aemetis.
Diversification Opportunities for BP Prudhoe and Aemetis
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BPT and Aemetis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BP Prudhoe Bay and Aemetis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aemetis and BP Prudhoe 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 Prudhoe Bay are associated (or correlated) with Aemetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aemetis has no effect on the direction of BP Prudhoe i.e., BP Prudhoe and Aemetis go up and down completely randomly.
Pair Corralation between BP Prudhoe and Aemetis
Considering the 90-day investment horizon BP Prudhoe Bay is expected to under-perform the Aemetis. But the stock apears to be less risky and, when comparing its historical volatility, BP Prudhoe Bay is 1.37 times less risky than Aemetis. The stock trades about -0.08 of its potential returns per unit of risk. The Aemetis is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 461.00 in Aemetis on August 27, 2024 and sell it today you would lose (58.00) from holding Aemetis or give up 12.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP Prudhoe Bay vs. Aemetis
Performance |
| Timeline |
| BP Prudhoe Bay |
| Aemetis |
BP Prudhoe and Aemetis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Prudhoe and Aemetis
The main advantage of trading using opposite BP Prudhoe and Aemetis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Prudhoe position performs unexpectedly, Aemetis 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 Aemetis will offset losses from the drop in Aemetis' long position.| BP Prudhoe vs. Viper Energy Ut | BP Prudhoe vs. FLEX LNG | BP Prudhoe vs. Hess Midstream Partners | BP Prudhoe vs. Frontline |
| Aemetis vs. PBF Energy | Aemetis vs. Clean Energy Fuels | Aemetis vs. Par Pacific Holdings | Aemetis vs. Vertex 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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