Correlation Between BP Plc and FANDIFI TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both BP Plc and FANDIFI TECHNOLOGY 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 Plc and FANDIFI TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP plc and FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on BP Plc and FANDIFI TECHNOLOGY 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 Plc with a short position of FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plc and FANDIFI TECHNOLOGY.
Diversification Opportunities for BP Plc and FANDIFI TECHNOLOGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BSU and FANDIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BP plc and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY and BP Plc 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 plc are associated (or correlated) with FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of BP Plc i.e., BP Plc and FANDIFI TECHNOLOGY go up and down completely randomly.
Pair Corralation between BP Plc and FANDIFI TECHNOLOGY
Assuming the 90 days horizon BP plc is expected to under-perform the FANDIFI TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, BP plc is 11.66 times less risky than FANDIFI TECHNOLOGY. The stock trades about -0.02 of its potential returns per unit of risk. The FANDIFI TECHNOLOGY P is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.15 in FANDIFI TECHNOLOGY P on September 4, 2024 and sell it today you would lose (0.10) from holding FANDIFI TECHNOLOGY P or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BP plc vs. FANDIFI TECHNOLOGY P
Performance |
| Timeline |
| BP plc |
| FANDIFI TECHNOLOGY |
BP Plc and FANDIFI TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plc and FANDIFI TECHNOLOGY
The main advantage of trading using opposite BP Plc and FANDIFI TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plc position performs unexpectedly, FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY will offset losses from the drop in FANDIFI TECHNOLOGY's long position.| BP Plc vs. FANDIFI TECHNOLOGY P | BP Plc vs. Sunny Optical Technology | BP Plc vs. Sanyo Chemical Industries | BP Plc vs. Sekisui Chemical Co |
| FANDIFI TECHNOLOGY vs. Rocket Internet SE | FANDIFI TECHNOLOGY vs. Superior Plus Corp | FANDIFI TECHNOLOGY vs. NMI Holdings | FANDIFI TECHNOLOGY vs. Origin Agritech |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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