Correlation Between Tyson Foods and BH Macro
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and BH Macro 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 Tyson Foods and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods Cl and BH Macro Limited, you can compare the effects of market volatilities on Tyson Foods and BH Macro 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 Tyson Foods with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and BH Macro.
Diversification Opportunities for Tyson Foods and BH Macro
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tyson and BHMU is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited and Tyson Foods 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 Tyson Foods Cl are associated (or correlated) with BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Tyson Foods i.e., Tyson Foods and BH Macro go up and down completely randomly.
Pair Corralation between Tyson Foods and BH Macro
Assuming the 90 days trading horizon Tyson Foods Cl is expected to generate 1.27 times more return on investment than BH Macro. However, Tyson Foods is 1.27 times more volatile than BH Macro Limited. It trades about 0.02 of its potential returns per unit of risk. BH Macro Limited is currently generating about -0.01 per unit of risk. If you would invest 6,029 in Tyson Foods Cl on September 4, 2024 and sell it today you would earn a total of 410.00 from holding Tyson Foods Cl or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Tyson Foods Cl vs. BH Macro Limited
Performance |
| Timeline |
| Tyson Foods Cl |
| BH Macro Limited |
Tyson Foods and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and BH Macro
The main advantage of trading using opposite Tyson Foods and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Hyundai Motor | Tyson Foods vs. Toyota Motor Corp |
| BH Macro vs. SupplyMe Capital PLC | BH Macro vs. Lloyds Banking Group | BH Macro vs. Premier African Minerals | BH Macro vs. SANTANDER UK 8 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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