Correlation Between Oil Natural and BF Utilities
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By analyzing existing cross correlation between Oil Natural Gas and BF Utilities Limited, you can compare the effects of market volatilities on Oil Natural and BF Utilities 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 Oil Natural with a short position of BF Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and BF Utilities.
Diversification Opportunities for Oil Natural and BF Utilities
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oil and BFUTILITIE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and BF Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF Utilities Limited and Oil Natural 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 Oil Natural Gas are associated (or correlated) with BF Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF Utilities Limited has no effect on the direction of Oil Natural i.e., Oil Natural and BF Utilities go up and down completely randomly.
Pair Corralation between Oil Natural and BF Utilities
Assuming the 90 days trading horizon Oil Natural Gas is expected to under-perform the BF Utilities. But the stock apears to be less risky and, when comparing its historical volatility, Oil Natural Gas is 1.99 times less risky than BF Utilities. The stock trades about -0.22 of its potential returns per unit of risk. The BF Utilities Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 91,775 in BF Utilities Limited on August 25, 2024 and sell it today you would earn a total of 3,760 from holding BF Utilities Limited or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Natural Gas vs. BF Utilities Limited
Performance |
| Timeline |
| Oil Natural Gas |
| BF Utilities Limited |
Oil Natural and BF Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Natural and BF Utilities
The main advantage of trading using opposite Oil Natural and BF Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Natural position performs unexpectedly, BF Utilities 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 BF Utilities will offset losses from the drop in BF Utilities' long position.| Oil Natural vs. Tata Communications Limited | Oil Natural vs. The Hi Tech Gears | Oil Natural vs. Allied Blenders Distillers | Oil Natural vs. DiGiSPICE Technologies Limited |
| BF Utilities vs. Reliance Industries Limited | BF Utilities vs. Oil Natural Gas | BF Utilities vs. ICICI Bank Limited | BF Utilities vs. Bharti Airtel Limited |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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