Correlation Between BP PLC and Yuma Energy
Can any of the company-specific risk be diversified away by investing in both BP PLC and Yuma 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 BP PLC and Yuma Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP PLC ADR and Yuma Energy, you can compare the effects of market volatilities on BP PLC and Yuma 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 BP PLC with a short position of Yuma Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and Yuma Energy.
Diversification Opportunities for BP PLC and Yuma Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BP PLC and Yuma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC ADR and Yuma Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuma Energy and BP PLC 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 BP PLC ADR are associated (or correlated) with Yuma Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuma Energy has no effect on the direction of BP PLC i.e., BP PLC and Yuma Energy go up and down completely randomly.
Pair Corralation between BP PLC and Yuma Energy
If you would invest 2,909 in BP PLC ADR on January 24, 2024 and sell it today you would earn a total of 982.00 from holding BP PLC ADR or generate 33.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BP PLC ADR vs. Yuma Energy
Performance |
| Timeline |
| BP PLC ADR |
| Yuma Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BP PLC and Yuma Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP PLC and Yuma Energy
The main advantage of trading using opposite BP PLC and Yuma Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC position performs unexpectedly, Yuma 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 Yuma Energy will offset losses from the drop in Yuma Energy's long position.The idea behind BP PLC ADR and Yuma Energy 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.| Yuma Energy vs. Parker Hannifin | Yuma Energy vs. Barings BDC | Yuma Energy vs. Alto Ingredients | Yuma Energy vs. Artisan Partners Asset |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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