Correlation Between BPI Energy and Niko Resources

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

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

Diversification Opportunities for BPI Energy and Niko Resources

0.0

Correlation Coefficient

BPI Energy  Niko Resources

Pay attention - limited upside

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

Pair Corralation between BPI Energy and Niko Resources

If you would invest  0.00  in Niko Resources on May 6, 2025 and sell it today you would earn a total of  0.00  from holding Niko Resources or generate 0.0% return on investment over 90 days.

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

BPI Energy Holdings  vs.  Niko Resources

BPI Energy Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BPI Energy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, BPI Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Niko Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Niko Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Niko Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BPI Energy and Niko Resources

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

The idea behind BPI Energy Holdings and Niko 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.