Correlation Between KENEDIX OFFICE and BP PLC
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and BP PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and BP PLC DZ1, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of BP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and BP PLC.
Diversification Opportunities for KENEDIX OFFICE and BP PLC
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KENEDIX and BPE is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and BP PLC DZ1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP PLC DZ1 and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 DZ1 has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and BP PLC go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and BP PLC
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.73 times more return on investment than BP PLC. However, KENEDIX OFFICE INV is 1.38 times less risky than BP PLC. It trades about -0.02 of its potential returns per unit of risk. BP PLC DZ1 is currently generating about -0.02 per unit of risk. If you would invest 107,000 in KENEDIX OFFICE INV on September 3, 2024 and sell it today you would lose (16,000) from holding KENEDIX OFFICE INV or give up 14.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. BP PLC DZ1
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| BP PLC DZ1 |
KENEDIX OFFICE and BP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and BP PLC
The main advantage of trading using opposite KENEDIX OFFICE and BP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. MARKET VECTR RETAIL | KENEDIX OFFICE vs. Perdoceo Education | KENEDIX OFFICE vs. TAL Education Group | KENEDIX OFFICE vs. SALESFORCE INC CDR |
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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