Correlation Between BKV and Middlebury National
Can any of the company-specific risk be diversified away by investing in both BKV and Middlebury National 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 BKV and Middlebury National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKV Corporation and Middlebury National, you can compare the effects of market volatilities on BKV and Middlebury National 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 BKV with a short position of Middlebury National. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKV and Middlebury National.
Diversification Opportunities for BKV and Middlebury National
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BKV and Middlebury is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and Middlebury National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middlebury National and BKV 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 BKV Corporation are associated (or correlated) with Middlebury National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middlebury National has no effect on the direction of BKV i.e., BKV and Middlebury National go up and down completely randomly.
Pair Corralation between BKV and Middlebury National
Considering the 90-day investment horizon BKV Corporation is expected to generate 0.54 times more return on investment than Middlebury National. However, BKV Corporation is 1.85 times less risky than Middlebury National. It trades about 0.21 of its potential returns per unit of risk. Middlebury National is currently generating about 0.03 per unit of risk. If you would invest 1,800 in BKV Corporation on September 26, 2024 and sell it today you would earn a total of 455.00 from holding BKV Corporation or generate 25.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 17.31% |
Values | Daily Returns |
BKV Corp. vs. Middlebury National
Performance |
Timeline |
BKV Corporation |
Middlebury National |
BKV and Middlebury National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BKV and Middlebury National
The main advantage of trading using opposite BKV and Middlebury National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKV position performs unexpectedly, Middlebury National 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 Middlebury National will offset losses from the drop in Middlebury National's long position.BKV vs. Antero Resources Corp | BKV vs. Empire Petroleum Corp | BKV vs. Permian Resources | BKV vs. SandRidge Energy |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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