Correlation Between BKV and Alpine Banks

Can any of the company-specific risk be diversified away by investing in both BKV and Alpine Banks 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 BKV and Alpine Banks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BKV Corporation and Alpine Banks of, you can compare the effects of market volatilities on BKV and Alpine Banks 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 BKV with a short position of Alpine Banks. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and Alpine Banks.

Diversification Opportunities for BKV and Alpine Banks

0.83

Correlation Coefficient

BKV  Alpine Banks

Very poor diversification

The 3 months correlation between BKV and Alpine is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks and BKV 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 BKV Corporation are associated (or correlated) with Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of BKV i.e., BKV and Alpine Banks go up and down completely randomly.

Pair Corralation between BKV and Alpine Banks

Considering the 90-day investment horizon BKV is expected to generate 2.34 times less return on investment than Alpine Banks. In addition to that, BKV is 4.56 times more volatile than Alpine Banks of. It trades about 0.04 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.44 per unit of volatility. If you would invest  3,298  in Alpine Banks of on September 24, 2024 and sell it today you would earn a total of  126.00  from holding Alpine Banks of or generate 3.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

BKV Corp.  vs.  Alpine Banks of

BKV Corporation

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BKV Corporation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, BKV showed solid returns over the last few months and may actually be approaching a breakup point.

Alpine Banks

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Banks of are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Alpine Banks sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BKV and Alpine Banks

The main advantage of trading using opposite BKV and Alpine Banks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKV position performs unexpectedly, Alpine Banks 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 Alpine Banks will offset losses from the drop in Alpine Banks' long position.

The idea behind BKV Corporation and Alpine Banks of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.