Correlation Between BROADWIND ENRGY and BHP Group
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY 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 BROADWIND ENRGY and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and BHP Group Limited, you can compare the effects of market volatilities on BROADWIND ENRGY 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 BROADWIND ENRGY with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and BHP Group.
Diversification Opportunities for BROADWIND ENRGY and BHP Group
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BROADWIND and BHP is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY 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 BROADWIND ENRGY 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 BROADWIND ENRGY 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 BROADWIND ENRGY i.e., BROADWIND ENRGY and BHP Group go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and BHP Group
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the BHP Group. In addition to that, BROADWIND ENRGY is 2.8 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 -0.01 per unit of volatility. If you would invest 5,503 in BHP Group Limited on October 25, 2024 and sell it today you would lose (833.00) from holding BHP Group Limited or give up 15.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. BHP Group Limited
Performance |
| Timeline |
| BROADWIND ENRGY |
| BHP Group Limited |
BROADWIND ENRGY and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and BHP Group
The main advantage of trading using opposite BROADWIND ENRGY and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY 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.| BROADWIND ENRGY vs. Meiko Electronics Co | BROADWIND ENRGY vs. GAZTRTECHNIUADR15EO01 | BROADWIND ENRGY vs. TT Electronics PLC | BROADWIND ENRGY 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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