Correlation Between EVS Broadcast and BHP Group
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast 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 EVS Broadcast and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and BHP Group Limited, you can compare the effects of market volatilities on EVS Broadcast 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 EVS Broadcast with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and BHP Group.
Diversification Opportunities for EVS Broadcast and BHP Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EVS and BHP is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment 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 EVS Broadcast 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 EVS Broadcast Equipment 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 EVS Broadcast i.e., EVS Broadcast and BHP Group go up and down completely randomly.
Pair Corralation between EVS Broadcast and BHP Group
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 1.0 times more return on investment than BHP Group. However, EVS Broadcast is 1.0 times more volatile than BHP Group Limited. It trades about 0.05 of its potential returns per unit of risk. BHP Group Limited is currently generating about 0.01 per unit of risk. If you would invest 3,075 in EVS Broadcast Equipment on October 25, 2024 and sell it today you would earn a total of 30.00 from holding EVS Broadcast Equipment or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. BHP Group Limited
Performance |
| Timeline |
| EVS Broadcast Equipment |
| BHP Group Limited |
EVS Broadcast and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and BHP Group
The main advantage of trading using opposite EVS Broadcast and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast 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.| EVS Broadcast vs. Waste Management | EVS Broadcast vs. Sunny Optical Technology | EVS Broadcast vs. ASPEN TECHINC DL | EVS Broadcast vs. Playtech plc |
| BHP Group vs. PKSHA TECHNOLOGY INC | BHP Group vs. FAST RETAIL ADR | BHP Group vs. Easy Software AG | BHP Group vs. DXC Technology Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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