Correlation Between Ultrapar Participacoes and BP Prudhoe
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes and BP Prudhoe 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 Ultrapar Participacoes and BP Prudhoe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and BP Prudhoe Bay, you can compare the effects of market volatilities on Ultrapar Participacoes and BP Prudhoe 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 Ultrapar Participacoes with a short position of BP Prudhoe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and BP Prudhoe.
Diversification Opportunities for Ultrapar Participacoes and BP Prudhoe
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultrapar and BPT is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and BP Prudhoe Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP Prudhoe Bay and Ultrapar Participacoes 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 Ultrapar Participacoes SA are associated (or correlated) with BP Prudhoe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP Prudhoe Bay has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and BP Prudhoe go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and BP Prudhoe
Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to under-perform the BP Prudhoe. But the stock apears to be less risky and, when comparing its historical volatility, Ultrapar Participacoes SA is 3.41 times less risky than BP Prudhoe. The stock trades about -0.23 of its potential returns per unit of risk. The BP Prudhoe Bay is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 234.00 in BP Prudhoe Bay on January 25, 2024 and sell it today you would lose (9.00) from holding BP Prudhoe Bay or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. BP Prudhoe Bay
Performance |
| Timeline |
| Ultrapar Participacoes |
| BP Prudhoe Bay |
Ultrapar Participacoes and BP Prudhoe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and BP Prudhoe
The main advantage of trading using opposite Ultrapar Participacoes and BP Prudhoe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes position performs unexpectedly, BP Prudhoe 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 BP Prudhoe will offset losses from the drop in BP Prudhoe's long position.| Ultrapar Participacoes vs. CVR Energy | Ultrapar Participacoes vs. PBF Energy | Ultrapar Participacoes vs. HF Sinclair Corp | Ultrapar Participacoes vs. Par Pacific Holdings |
| BP Prudhoe vs. Summit Midstream Partners | BP Prudhoe vs. Mirage Energy Corp | BP Prudhoe vs. Teekay Tankers | BP Prudhoe vs. International Seaways |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |