Correlation Between BP Plc and BP Plc
Can any of the company-specific risk be diversified away by investing in both BP Plc and BP Plc 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 BP Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP plc and BP plc, you can compare the effects of market volatilities on BP Plc and BP Plc 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 BP Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plc and BP Plc.
Diversification Opportunities for BP Plc and BP Plc
Almost no diversification
The 3 months correlation between BSU and BSU is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BP plc and BP plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP plc 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 BP Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP plc has no effect on the direction of BP Plc i.e., BP Plc and BP Plc go up and down completely randomly.
Pair Corralation between BP Plc and BP Plc
Assuming the 90 days trading horizon BP plc is expected to generate 0.85 times more return on investment than BP Plc. However, BP plc is 1.18 times less risky than BP Plc. It trades about -0.08 of its potential returns per unit of risk. BP plc is currently generating about -0.07 per unit of risk. If you would invest 3,249 in BP plc on August 28, 2024 and sell it today you would lose (489.00) from holding BP plc or give up 15.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP plc vs. BP plc
Performance |
| Timeline |
| BP plc |
| BP plc |
BP Plc and BP Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plc and BP Plc
The main advantage of trading using opposite BP Plc and BP Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plc position performs unexpectedly, BP Plc 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 BP Plc will offset losses from the drop in BP Plc's long position.| BP Plc vs. Superior Plus Corp | BP Plc vs. Origin Agritech | BP Plc vs. Identiv | BP Plc vs. INTUITIVE SURGICAL |
| BP Plc vs. HOCHSCHILD MINING | BP Plc vs. GALENA MINING LTD | BP Plc vs. TROPHY GAMES DEV | BP Plc vs. EAST SIDE GAMES |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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