Correlation Between Foothills Exploration and BPI Energy
Can any of the company-specific risk be diversified away by investing in both Foothills Exploration and BPI Energy 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 Foothills Exploration and BPI Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foothills Exploration and BPI Energy Holdings, you can compare the effects of market volatilities on Foothills Exploration and BPI Energy 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 Foothills Exploration with a short position of BPI Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foothills Exploration and BPI Energy.
Diversification Opportunities for Foothills Exploration and BPI Energy
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Foothills and BPI is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Foothills Exploration and BPI Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPI Energy Holdings and Foothills Exploration 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 Foothills Exploration are associated (or correlated) with BPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPI Energy Holdings has no effect on the direction of Foothills Exploration i.e., Foothills Exploration and BPI Energy go up and down completely randomly.
Pair Corralation between Foothills Exploration and BPI Energy
If you would invest 0.01 in BPI Energy Holdings on September 14, 2024 and sell it today you would earn a total of 0.00 from holding BPI Energy Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Foothills Exploration vs. BPI Energy Holdings
Performance |
| Timeline |
| Foothills Exploration |
| BPI Energy Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Foothills Exploration and BPI Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foothills Exploration and BPI Energy
The main advantage of trading using opposite Foothills Exploration and BPI Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foothills Exploration position performs unexpectedly, BPI Energy 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 BPI Energy will offset losses from the drop in BPI Energy's long position.| Foothills Exploration vs. Permian Resources | Foothills Exploration vs. Devon Energy | Foothills Exploration vs. EOG Resources | Foothills Exploration vs. Coterra Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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