Correlation Between Basic Energy and First Abacus
Can any of the company-specific risk be diversified away by investing in both Basic Energy and First Abacus 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 Basic Energy and First Abacus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Energy Corp and First Abacus Financial, you can compare the effects of market volatilities on Basic Energy and First Abacus 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 Basic Energy with a short position of First Abacus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Energy and First Abacus.
Diversification Opportunities for Basic Energy and First Abacus
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Basic and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Basic Energy Corp and First Abacus Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Abacus Financial and Basic 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 Basic Energy Corp are associated (or correlated) with First Abacus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Abacus Financial has no effect on the direction of Basic Energy i.e., Basic Energy and First Abacus go up and down completely randomly.
Pair Corralation between Basic Energy and First Abacus
If you would invest 69.00 in First Abacus Financial on August 29, 2024 and sell it today you would earn a total of 0.00 from holding First Abacus Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.73% |
| Values | Daily Returns |
Basic Energy Corp vs. First Abacus Financial
Performance |
| Timeline |
| Basic Energy Corp |
| First Abacus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Basic Energy and First Abacus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Energy and First Abacus
The main advantage of trading using opposite Basic Energy and First Abacus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Energy position performs unexpectedly, First Abacus 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 First Abacus will offset losses from the drop in First Abacus' long position.| Basic Energy vs. Oriental Petroleum and | Basic Energy vs. GT Capital Holdings | Basic Energy vs. Allhome Corp | Basic Energy vs. Jollibee Foods Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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