Correlation Between Basic Energy and Illumina
Can any of the company-specific risk be diversified away by investing in both Basic Energy and Illumina 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 Basic Energy and Illumina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Energy Services and Illumina, you can compare the effects of market volatilities on Basic Energy and Illumina 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 Basic Energy with a short position of Illumina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Energy and Illumina.
Diversification Opportunities for Basic Energy and Illumina
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Basic and Illumina is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Basic Energy Services and Illumina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illumina and Basic Energy 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 Basic Energy Services are associated (or correlated) with Illumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illumina has no effect on the direction of Basic Energy i.e., Basic Energy and Illumina go up and down completely randomly.
Pair Corralation between Basic Energy and Illumina
If you would invest (100.00) in Basic Energy Services on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Basic Energy Services or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Basic Energy Services vs. Illumina
Performance |
| Timeline |
| Basic Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Illumina |
Basic Energy and Illumina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Energy and Illumina
The main advantage of trading using opposite Basic Energy and Illumina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Energy position performs unexpectedly, Illumina 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 Illumina will offset losses from the drop in Illumina's long position.| Basic Energy vs. Molson Coors Brewing | Basic Energy vs. CECO Environmental Corp | Basic Energy vs. Boston Beer | Basic Energy vs. Gfl Environmental Holdings |
| Illumina vs. Fonar | Illumina vs. Burning Rock BiotechLtd | Illumina vs. Sera Prognostics | Illumina vs. Psychemedics |
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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