Correlation Between Petrus Resources and Bengal Energy
Can any of the company-specific risk be diversified away by investing in both Petrus Resources and Bengal 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 Petrus Resources and Bengal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrus Resources and Bengal Energy, you can compare the effects of market volatilities on Petrus Resources and Bengal 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 Petrus Resources with a short position of Bengal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrus Resources and Bengal Energy.
Diversification Opportunities for Petrus Resources and Bengal Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrus and Bengal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petrus Resources and Bengal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengal Energy and Petrus Resources 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 Petrus Resources are associated (or correlated) with Bengal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengal Energy has no effect on the direction of Petrus Resources i.e., Petrus Resources and Bengal Energy go up and down completely randomly.
Pair Corralation between Petrus Resources and Bengal Energy
Assuming the 90 days horizon Petrus Resources is expected to generate 2.59 times less return on investment than Bengal Energy. But when comparing it to its historical volatility, Petrus Resources is 4.02 times less risky than Bengal Energy. It trades about 0.06 of its potential returns per unit of risk. Bengal Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Bengal Energy on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Bengal Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Petrus Resources vs. Bengal Energy
Performance |
| Timeline |
| Petrus Resources |
| Bengal Energy |
Petrus Resources and Bengal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrus Resources and Bengal Energy
The main advantage of trading using opposite Petrus Resources and Bengal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrus Resources position performs unexpectedly, Bengal 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 Bengal Energy will offset losses from the drop in Bengal Energy's long position.| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
| Bengal Energy vs. Questerre Energy | Bengal Energy vs. Petrus Resources | Bengal Energy vs. PetroShale | Bengal Energy vs. Calima Energy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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