Correlation Between Brent Crude and Better World
Can any of the company-specific risk be diversified away by investing in both Brent Crude and Better World 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 Brent Crude and Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brent Crude Oil and Better World Acquisition, you can compare the effects of market volatilities on Brent Crude and Better World 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 Brent Crude with a short position of Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brent Crude and Better World.
Diversification Opportunities for Brent Crude and Better World
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brent and Better is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Brent Crude Oil and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition and Brent Crude 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 Brent Crude Oil are associated (or correlated) with Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of Brent Crude i.e., Brent Crude and Better World go up and down completely randomly.
Pair Corralation between Brent Crude and Better World
If you would invest 7,593 in Brent Crude Oil on November 2, 2024 and sell it today you would lose (4.00) from holding Brent Crude Oil or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Brent Crude Oil vs. Better World Acquisition
Performance |
| Timeline |
| Brent Crude Oil |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brent Crude and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brent Crude and Better World
The main advantage of trading using opposite Brent Crude and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brent Crude position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Brent Crude vs. Natural Gas | Brent Crude vs. Lean Hogs Futures | Brent Crude vs. Live Cattle Futures | Brent Crude vs. Lumber Futures |
| Better World vs. Harmony Gold Mining | Better World vs. Air Products and | Better World vs. Avient Corp | Better World vs. Sealed Air |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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