Correlation Between BKI Investment and Havilah Resources

Can any of the company-specific risk be diversified away by investing in both BKI Investment and Havilah Resources 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 BKI Investment and Havilah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BKI Investment and Havilah Resources, you can compare the effects of market volatilities on BKI Investment and Havilah Resources 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 BKI Investment with a short position of Havilah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Havilah Resources.

Diversification Opportunities for BKI Investment and Havilah Resources

-0.02

Correlation Coefficient

BKI Investment  Havilah Resources

Good diversification

The 3 months correlation between BKI and Havilah is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Havilah Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havilah Resources and BKI Investment 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 BKI Investment are associated (or correlated) with Havilah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havilah Resources has no effect on the direction of BKI Investment i.e., BKI Investment and Havilah Resources go up and down completely randomly.

Pair Corralation between BKI Investment and Havilah Resources

Assuming the 90 days trading horizon BKI Investment is expected to generate 0.18 times more return on investment than Havilah Resources. However, BKI Investment is 5.59 times less risky than Havilah Resources. It trades about -0.01 of its potential returns per unit of risk. Havilah Resources is currently generating about 0.0 per unit of risk. If you would invest  173.00  in BKI Investment on October 25, 2024 and sell it today you would lose (1.00) from holding BKI Investment or give up 0.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BKI Investment  vs.  Havilah Resources

BKI Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BKI Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BKI Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Havilah Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Havilah Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Havilah Resources is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BKI Investment and Havilah Resources

The main advantage of trading using opposite BKI Investment and Havilah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Havilah Resources 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 Havilah Resources will offset losses from the drop in Havilah Resources' long position.

The idea behind BKI Investment and Havilah Resources 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.