Correlation Between BKV and CARRIER

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

By analyzing existing cross correlation between BKV Corporation and CARRIER GLOBAL P, you can compare the effects of market volatilities on BKV and CARRIER 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 CARRIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and CARRIER.

Diversification Opportunities for BKV and CARRIER

-0.38

Correlation Coefficient

BKV  CARRIER

Very good diversification

The 3 months correlation between BKV and CARRIER is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of BKV i.e., BKV and CARRIER go up and down completely randomly.

Pair Corralation between BKV and CARRIER

Considering the 90-day investment horizon BKV Corporation is expected to generate 2.69 times more return on investment than CARRIER. However, BKV is 2.69 times more volatile than CARRIER GLOBAL P. It trades about 0.17 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.16 per unit of risk. If you would invest  1,800  in BKV Corporation on September 24, 2024 and sell it today you would earn a total of  369.00  from holding BKV Corporation or generate 20.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

BKV Corp.  vs.  CARRIER GLOBAL P

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.

CARRIER GLOBAL P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARRIER GLOBAL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CARRIER GLOBAL P investors.

Pair Trading with BKV and CARRIER

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

The idea behind BKV Corporation and CARRIER GLOBAL P 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.