Correlation Between CO2 Energy and BK Technologies
Can any of the company-specific risk be diversified away by investing in both CO2 Energy and BK Technologies 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 CO2 Energy and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CO2 Energy Transition and BK Technologies, you can compare the effects of market volatilities on CO2 Energy and BK Technologies 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 CO2 Energy with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CO2 Energy and BK Technologies.
Diversification Opportunities for CO2 Energy and BK Technologies
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CO2 and BKTI is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CO2 Energy Transition and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and CO2 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 CO2 Energy Transition are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of CO2 Energy i.e., CO2 Energy and BK Technologies go up and down completely randomly.
Pair Corralation between CO2 Energy and BK Technologies
Assuming the 90 days horizon CO2 Energy is expected to generate 10.55 times less return on investment than BK Technologies. But when comparing it to its historical volatility, CO2 Energy Transition is 26.16 times less risky than BK Technologies. It trades about 0.24 of its potential returns per unit of risk. BK Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,740 in BK Technologies on October 26, 2024 and sell it today you would earn a total of 610.00 from holding BK Technologies or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.49% |
| Values | Daily Returns |
CO2 Energy Transition vs. BK Technologies
Performance |
| Timeline |
| CO2 Energy Transition |
| BK Technologies |
CO2 Energy and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CO2 Energy and BK Technologies
The main advantage of trading using opposite CO2 Energy and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CO2 Energy position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| CO2 Energy vs. Voyager Acquisition Corp | CO2 Energy vs. YHN Acquisition I | CO2 Energy vs. YHN Acquisition I | CO2 Energy vs. Vine Hill Capital |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Baylin Technologies |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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