Correlation Between BP Prudhoe and Icahn Enterprises
Can any of the company-specific risk be diversified away by investing in both BP Prudhoe and Icahn Enterprises 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 Icahn Enterprises 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 Icahn Enterprises LP, you can compare the effects of market volatilities on BP Prudhoe and Icahn Enterprises 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 Icahn Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Prudhoe and Icahn Enterprises.
Diversification Opportunities for BP Prudhoe and Icahn Enterprises
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BPT and Icahn is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BP Prudhoe Bay and Icahn Enterprises LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icahn Enterprises 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 Icahn Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icahn Enterprises has no effect on the direction of BP Prudhoe i.e., BP Prudhoe and Icahn Enterprises go up and down completely randomly.
Pair Corralation between BP Prudhoe and Icahn Enterprises
Considering the 90-day investment horizon BP Prudhoe Bay is expected to under-perform the Icahn Enterprises. In addition to that, BP Prudhoe is 4.06 times more volatile than Icahn Enterprises LP. It trades about 0.0 of its total potential returns per unit of risk. Icahn Enterprises LP is currently generating about 0.22 per unit of volatility. If you would invest 915.00 in Icahn Enterprises LP on November 9, 2024 and sell it today you would earn a total of 61.00 from holding Icahn Enterprises LP or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP Prudhoe Bay vs. Icahn Enterprises LP
Performance |
| Timeline |
| BP Prudhoe Bay |
| Icahn Enterprises |
BP Prudhoe and Icahn Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Prudhoe and Icahn Enterprises
The main advantage of trading using opposite BP Prudhoe and Icahn Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Prudhoe position performs unexpectedly, Icahn Enterprises 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 Icahn Enterprises will offset losses from the drop in Icahn Enterprises' long position.| BP Prudhoe vs. Viper Energy Ut | BP Prudhoe vs. FLEX LNG | BP Prudhoe vs. Hess Midstream Partners | BP Prudhoe vs. Frontline |
| Icahn Enterprises vs. Delek Energy | Icahn Enterprises vs. PBF Energy | Icahn Enterprises vs. HF Sinclair Corp | Icahn Enterprises vs. Delek Logistics Partners |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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