Correlation Between CITY OFFICE and BHP Group
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and BHP Group Limited, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and BHP Group.
Diversification Opportunities for CITY OFFICE and BHP Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and BHP is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT 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 CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and BHP Group go up and down completely randomly.
Pair Corralation between CITY OFFICE and BHP Group
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the BHP Group. In addition to that, CITY OFFICE is 1.58 times more volatile than BHP Group Limited. It trades about -0.02 of its total potential returns per unit of risk. BHP Group Limited is currently generating about 0.05 per unit of volatility. If you would invest 2,367 in BHP Group Limited on October 25, 2024 and sell it today you would earn a total of 25.00 from holding BHP Group Limited or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. BHP Group Limited
Performance |
| Timeline |
| CITY OFFICE REIT |
| BHP Group Limited |
CITY OFFICE and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and BHP Group
The main advantage of trading using opposite CITY OFFICE and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. Semiconductor Manufacturing International | CITY OFFICE vs. MagnaChip Semiconductor Corp | CITY OFFICE vs. APPLIED MATERIALS | CITY OFFICE vs. BE Semiconductor Industries |
| BHP Group vs. Neinor Homes SA | BHP Group vs. Fair Isaac Corp | BHP Group vs. Addus HomeCare | BHP Group vs. CITY OFFICE REIT |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |