Correlation Between Pfeiffer Vacuum and BHP Group
Can any of the company-specific risk be diversified away by investing in both Pfeiffer Vacuum and BHP Group 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 Pfeiffer Vacuum and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfeiffer Vacuum Technology and BHP Group Limited, you can compare the effects of market volatilities on Pfeiffer Vacuum and BHP Group 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 Pfeiffer Vacuum with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfeiffer Vacuum and BHP Group.
Diversification Opportunities for Pfeiffer Vacuum and BHP Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pfeiffer and BHP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pfeiffer Vacuum Technology and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited and Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology are associated (or correlated) with BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Pfeiffer Vacuum i.e., Pfeiffer Vacuum and BHP Group go up and down completely randomly.
Pair Corralation between Pfeiffer Vacuum and BHP Group
Assuming the 90 days trading horizon Pfeiffer Vacuum Technology is expected to under-perform the BHP Group. But the stock apears to be less risky and, when comparing its historical volatility, Pfeiffer Vacuum Technology is 3.2 times less risky than BHP Group. The stock trades about -0.09 of its potential returns per unit of risk. The BHP Group Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 205,800 in BHP Group Limited on September 14, 2024 and sell it today you would earn a total of 1,300 from holding BHP Group Limited or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfeiffer Vacuum Technology vs. BHP Group Limited
Performance |
| Timeline |
| Pfeiffer Vacuum Tech |
| BHP Group Limited |
Pfeiffer Vacuum and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfeiffer Vacuum and BHP Group
The main advantage of trading using opposite Pfeiffer Vacuum and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfeiffer Vacuum position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.| Pfeiffer Vacuum vs. Finnair Oyj | Pfeiffer Vacuum vs. Gaztransport et Technigaz | Pfeiffer Vacuum vs. Taiwan Semiconductor Manufacturing | Pfeiffer Vacuum vs. Ryanair Holdings plc |
| BHP Group vs. Check Point Software | BHP Group vs. Sabien Technology Group | BHP Group vs. Pfeiffer Vacuum Technology | BHP Group vs. MTI Wireless Edge |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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