Correlation Between Helmerich and BKV

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

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

Diversification Opportunities for Helmerich and BKV

-0.01

Correlation Coefficient

Helmerich  BKV

Good diversification

The 3 months correlation between Helmerich and BKV is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich and Payne and BKV Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKV Corporation and Helmerich 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 Helmerich and Payne are associated (or correlated) with BKV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKV Corporation has no effect on the direction of Helmerich i.e., Helmerich and BKV go up and down completely randomly.

Pair Corralation between Helmerich and BKV

Allowing for the 90-day total investment horizon Helmerich and Payne is expected to under-perform the BKV. In addition to that, Helmerich is 1.4 times more volatile than BKV Corporation. It trades about -0.02 of its total potential returns per unit of risk. BKV Corporation is currently generating about 0.18 per unit of volatility. If you would invest  1,800  in BKV Corporation on September 22, 2024 and sell it today you would earn a total of  369.00  from holding BKV Corporation or generate 20.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	48.03%
Values	Daily Returns

Helmerich and Payne  vs.  BKV Corp.

Helmerich and Payne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helmerich and Payne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Helmerich is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

BKV Corporation

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BKV Corporation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, BKV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helmerich and BKV

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

The idea behind Helmerich and Payne and BKV Corporation 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.