Correlation Between BP Prudhoe and Brooge Energy

Can any of the company-specific risk be diversified away by investing in both BP Prudhoe and Brooge Energy 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 BP Prudhoe and Brooge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BP Prudhoe Bay and Brooge Energy Limited, you can compare the effects of market volatilities on BP Prudhoe and Brooge Energy 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 Prudhoe with a short position of Brooge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Prudhoe and Brooge Energy.

Diversification Opportunities for BP Prudhoe and Brooge Energy

0.0

Correlation Coefficient

BP Prudhoe  Brooge Energy

Pay attention - limited upside

The 3 months correlation between BPT and Brooge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BP Prudhoe Bay and Brooge Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Energy Limited and BP Prudhoe 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 Prudhoe Bay are associated (or correlated) with Brooge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Energy Limited has no effect on the direction of BP Prudhoe i.e., BP Prudhoe and Brooge Energy go up and down completely randomly.

Pair Corralation between BP Prudhoe and Brooge Energy

If you would invest  56.00  in BP Prudhoe Bay on December 28, 2024 and sell it today you would earn a total of  1.00  from holding BP Prudhoe Bay or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BP Prudhoe Bay  vs.  Brooge Energy Limited

BP Prudhoe Bay

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BP Prudhoe Bay are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, BP Prudhoe unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brooge Energy Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brooge Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Brooge Energy is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BP Prudhoe and Brooge Energy

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

The idea behind BP Prudhoe Bay and Brooge Energy Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.