Pair Correlation Between BP plc and Facebook

This module allows you to analyze existing cross correlation between BP plc and Facebook Inc. 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.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 BP p.l.c.  vs   Facebook Inc
 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, BP plc is expected to generate 6.68 times less return on investment than Facebook. But when comparing it to its historical volatility, BP plc is 1.07 times less risky than Facebook. It trades about 0.03 of its potential returns per unit of risk. Facebook Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  17,127  in Facebook Inc on October 22, 2017 and sell it today you would earn a total of  747  from holding Facebook Inc or generate 4.36% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between BP plc and Facebook
0.66

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diversification

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding BP p.l.c. and Facebook Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Facebook Inc 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 Inc has no effect on the direction of BP plc i.e. BP plc and Facebook go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

BP plc

  
1 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in BP plc are ranked lower than 1 (%) of all global equities and portfolios over the last 30 days.

Facebook Inc

  
11 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Facebook Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 30 days.