Correlation Analysis Between BP plc and Facebook

This module allows you to analyze existing cross correlation between BP plc and Facebook. You can compare the effects of market volatilities on BP plc and Facebook 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 Facebook. See also your portfolio center. Please also check ongoing floating volatility patterns of BP plc and Facebook.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

BP plc  
0

Risk-Adjusted Performance

Over the last 30 days BP plc has generated negative risk-adjusted returns adding no value to investors with long positions.
Facebook  
0

Risk-Adjusted Performance

Over the last 30 days Facebook has generated negative risk-adjusted returns adding no value to investors with long positions.

BP plc and Facebook Volatility Contrast

 Predicted Return Density 
      Returns 

BP plc  vs.  Facebook Inc

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, BP plc is expected to under-perform the Facebook. But the stock apears to be less risky and, when comparing its historical volatility, BP plc is 1.29 times less risky than Facebook. The stock trades about -0.16 of its potential returns per unit of risk. The Facebook is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  15,352  in Facebook on November 14, 2018 and sell it today you would lose (946.00)  from holding Facebook or give up 6.16% of portfolio value over 30 days.

Pair Corralation between BP plc and Facebook

0.8
Time Period2 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for BP plc and Facebook

BP plc diversification synergy

Very poor diversification

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

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