Correlation Between Barnwell Industries and CKX Lands
Can any of the company-specific risk be diversified away by investing in both Barnwell Industries and CKX Lands 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 Barnwell Industries and CKX Lands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnwell Industries and CKX Lands, you can compare the effects of market volatilities on Barnwell Industries and CKX Lands 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 Barnwell Industries with a short position of CKX Lands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnwell Industries and CKX Lands.
Diversification Opportunities for Barnwell Industries and CKX Lands
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barnwell and CKX is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Barnwell Industries and CKX Lands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKX Lands and Barnwell Industries 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 Barnwell Industries are associated (or correlated) with CKX Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKX Lands has no effect on the direction of Barnwell Industries i.e., Barnwell Industries and CKX Lands go up and down completely randomly.
Pair Corralation between Barnwell Industries and CKX Lands
Considering the 90-day investment horizon Barnwell Industries is expected to under-perform the CKX Lands. But the stock apears to be less risky and, when comparing its historical volatility, Barnwell Industries is 33.97 times less risky than CKX Lands. The stock trades about -0.13 of its potential returns per unit of risk. The CKX Lands is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,383 in CKX Lands on August 24, 2024 and sell it today you would lose (132.00) from holding CKX Lands or give up 9.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.2% |
| Values | Daily Returns |
Barnwell Industries vs. CKX Lands
Performance |
| Timeline |
| Barnwell Industries |
| CKX Lands |
Barnwell Industries and CKX Lands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnwell Industries and CKX Lands
The main advantage of trading using opposite Barnwell Industries and CKX Lands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnwell Industries position performs unexpectedly, CKX Lands 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 CKX Lands will offset losses from the drop in CKX Lands' long position.| Barnwell Industries vs. Houston American Energy | Barnwell Industries vs. Mexco Energy | Barnwell Industries vs. PHX Minerals | Barnwell Industries vs. Ring Energy |
| CKX Lands vs. PrimeEnergy | CKX Lands vs. MorningStar Partners, LP | CKX Lands vs. XXL Energy Corp | CKX Lands vs. Magnolia Oil Gas |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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