Correlation Between Saturn Oil and BPI Energy

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

By analyzing existing cross correlation between Saturn Oil Gas and BPI Energy Holdings, you can compare the effects of market volatilities on Saturn Oil and BPI Energy 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 Saturn Oil with a short position of BPI Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saturn Oil and BPI Energy.

Diversification Opportunities for Saturn Oil and BPI Energy

0.0

Correlation Coefficient

Saturn Oil  BPI Energy

Pay attention - limited upside

The 3 months correlation between Saturn and BPI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Saturn Oil Gas and BPI Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPI Energy Holdings and Saturn Oil 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 Saturn Oil Gas are associated (or correlated) with BPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPI Energy Holdings has no effect on the direction of Saturn Oil i.e., Saturn Oil and BPI Energy go up and down completely randomly.

Pair Corralation between Saturn Oil and BPI Energy

If you would invest  0.01  in BPI Energy Holdings on September 24, 2024 and sell it today you would earn a total of  0.00  from holding BPI Energy Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.43%
Values	Daily Returns

Saturn Oil Gas  vs.  BPI Energy Holdings

Saturn Oil Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saturn Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BPI Energy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BPI Energy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, BPI Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Saturn Oil and BPI Energy

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

The idea behind Saturn Oil Gas and BPI Energy Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.