Correlation Between Energy and Butler National
Can any of the company-specific risk be diversified away by investing in both Energy and Butler National 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 Energy and Butler National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy and Water and Butler National Corp, you can compare the effects of market volatilities on Energy and Butler National 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 Energy with a short position of Butler National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy and Butler National.
Diversification Opportunities for Energy and Butler National
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energy and Butler is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Energy and Water and Butler National Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Butler National Corp and 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 Energy and Water are associated (or correlated) with Butler National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Butler National Corp has no effect on the direction of Energy i.e., Energy and Butler National go up and down completely randomly.
Pair Corralation between Energy and Butler National
Given the investment horizon of 90 days Energy and Water is expected to under-perform the Butler National. In addition to that, Energy is 4.76 times more volatile than Butler National Corp. It trades about -0.11 of its total potential returns per unit of risk. Butler National Corp is currently generating about 0.17 per unit of volatility. If you would invest 81.00 in Butler National Corp on September 3, 2024 and sell it today you would earn a total of 86.00 from holding Butler National Corp or generate 106.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy and Water vs. Butler National Corp
Performance |
| Timeline |
| Energy and Water |
| Butler National Corp |
Energy and Butler National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy and Butler National
The main advantage of trading using opposite Energy and Butler National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy position performs unexpectedly, Butler National 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 Butler National will offset losses from the drop in Butler National's long position.| Energy vs. Vow ASA | Energy vs. Eestech | Energy vs. One World Universe | Energy vs. Bion Environmental Technologies |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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