Correlation Between Concepcion Industrial and Basic Energy

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

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

Diversification Opportunities for Concepcion Industrial and Basic Energy

0.33

Correlation Coefficient

Concepcion Industrial  Basic Energy

Weak diversification

The 3 months correlation between Concepcion and Basic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and Basic Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Energy Corp and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with Basic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Energy Corp has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and Basic Energy go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Basic Energy

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to under-perform the Basic Energy. But the stock apears to be less risky and, when comparing its historical volatility, Concepcion Industrial Corp is 3.16 times less risky than Basic Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Basic Energy Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Basic Energy Corp on May 17, 2025 and sell it today you would earn a total of  0.00  from holding Basic Energy Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Concepcion Industrial Corp  vs.  Basic Energy Corp

Concepcion Industrial

Risk-Adjusted Performance

Weakest

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Basic Energy Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Basic Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Basic Energy is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Concepcion Industrial and Basic Energy

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

The idea behind Concepcion Industrial Corp and Basic Energy Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.