Correlation Between Bristow and California Resources
Can any of the company-specific risk be diversified away by investing in both Bristow and California Resources 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 Bristow and California Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristow Group and California Resources, you can compare the effects of market volatilities on Bristow and California Resources 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 Bristow with a short position of California Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and California Resources.
Diversification Opportunities for Bristow and California Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bristow and California is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and California Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Resources and Bristow 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 Bristow Group are associated (or correlated) with California Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Resources has no effect on the direction of Bristow i.e., Bristow and California Resources go up and down completely randomly.
Pair Corralation between Bristow and California Resources
Given the investment horizon of 90 days Bristow is expected to generate 7.98 times less return on investment than California Resources. But when comparing it to its historical volatility, Bristow Group is 3.6 times less risky than California Resources. It trades about 0.06 of its potential returns per unit of risk. California Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 833.00 in California Resources on September 2, 2024 and sell it today you would earn a total of 879.00 from holding California Resources or generate 105.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.16% |
| Values | Daily Returns |
Bristow Group vs. California Resources
Performance |
| Timeline |
| Bristow Group |
| California Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Bristow and California Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristow and California Resources
The main advantage of trading using opposite Bristow and California Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow position performs unexpectedly, California Resources 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 California Resources will offset losses from the drop in California Resources' long position.| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
| California Resources vs. Cardinal Energy | California Resources vs. Spartan Delta Corp | California Resources vs. Delek Group | California Resources vs. Bonterra Energy Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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