Correlation Between BKV and EI Du
Can any of the company-specific risk be diversified away by investing in both BKV and EI Du 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 EI Du into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKV Corporation and EI du Pont, you can compare the effects of market volatilities on BKV and EI Du 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 EI Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and EI Du.
Diversification Opportunities for BKV and EI Du
Excellent diversification
The 3 months correlation between BKV and CTA-P-A is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and EI du Pont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EI du Pont 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 EI Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EI du Pont has no effect on the direction of BKV i.e., BKV and EI Du go up and down completely randomly.
Pair Corralation between BKV and EI Du
Considering the 90-day investment horizon BKV Corporation is expected to generate 0.85 times more return on investment than EI Du. However, BKV Corporation is 1.18 times less risky than EI Du. It trades about 0.19 of its potential returns per unit of risk. EI du Pont is currently generating about -0.17 per unit of risk. If you would invest 1,829 in BKV Corporation on September 29, 2024 and sell it today you would earn a total of 424.00 from holding BKV Corporation or generate 23.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 66.67% |
Values | Daily Returns |
BKV Corp. vs. EI du Pont
Performance |
Timeline |
BKV Corporation |
EI du Pont |
BKV and EI Du Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BKV and EI Du
The main advantage of trading using opposite BKV and EI Du positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKV position performs unexpectedly, EI Du 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 EI Du will offset losses from the drop in EI Du's long position.BKV vs. Antero Resources Corp | BKV vs. Empire Petroleum Corp | BKV vs. Permian Resources | BKV vs. SandRidge Energy |
EI Du vs. Monster Beverage Corp | EI Du vs. National Beverage Corp | EI Du vs. Boston Beer | EI Du vs. Vita Coco |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |