Correlation Between Civitas Resources and BCE
Can any of the company-specific risk be diversified away by investing in both Civitas Resources and BCE 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 Civitas Resources and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Civitas Resources and BCE Inc, you can compare the effects of market volatilities on Civitas Resources and BCE 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 Civitas Resources with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Civitas Resources and BCE.
Diversification Opportunities for Civitas Resources and BCE
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Civitas and BCE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Civitas Resources and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Civitas Resources 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 Civitas Resources are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Civitas Resources i.e., Civitas Resources and BCE go up and down completely randomly.
Pair Corralation between Civitas Resources and BCE
Assuming the 90 days horizon Civitas Resources is expected to under-perform the BCE. In addition to that, Civitas Resources is 6.66 times more volatile than BCE Inc. It trades about -0.08 of its total potential returns per unit of risk. BCE Inc is currently generating about -0.37 per unit of volatility. If you would invest 3,226 in BCE Inc on September 1, 2024 and sell it today you would lose (523.00) from holding BCE Inc or give up 16.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Civitas Resources vs. BCE Inc
Performance |
| Timeline |
| Civitas Resources |
| BCE Inc |
Civitas Resources and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Civitas Resources and BCE
The main advantage of trading using opposite Civitas Resources and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civitas Resources position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Civitas Resources vs. Legacy Education | Civitas Resources vs. Apple Inc | Civitas Resources vs. NVIDIA | Civitas Resources vs. Microsoft |
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 Stocks Directory module to find actively traded stocks across global markets.
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