Correlation Between Bank of Georgia and BP Plc
Can any of the company-specific risk be diversified away by investing in both Bank of Georgia 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 Bank of Georgia and BP Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Georgia and BP plc, you can compare the effects of market volatilities on Bank of Georgia 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 Bank of Georgia with a short position of BP Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Georgia and BP Plc.
Diversification Opportunities for Bank of Georgia and BP Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and BP-A is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Georgia and BP plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP plc and Bank of Georgia 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 Bank of Georgia 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 has no effect on the direction of Bank of Georgia i.e., Bank of Georgia and BP Plc go up and down completely randomly.
Pair Corralation between Bank of Georgia and BP Plc
If you would invest 390,669 in Bank of Georgia on September 15, 2024 and sell it today you would earn a total of 67,331 from holding Bank of Georgia or generate 17.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.54% |
Values | Daily Returns |
Bank of Georgia vs. BP plc
Performance |
Timeline |
Bank of Georgia |
BP plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of Georgia and BP Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Georgia and BP Plc
The main advantage of trading using opposite Bank of Georgia and BP Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Georgia 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.Bank of Georgia vs. Livermore Investments Group | Bank of Georgia vs. Spirent Communications plc | Bank of Georgia vs. mobilezone holding AG | Bank of Georgia vs. Ecclesiastical Insurance Office |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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