Correlation Between BH Macro and Hansa Investment
Can any of the company-specific risk be diversified away by investing in both BH Macro and Hansa Investment 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 BH Macro and Hansa Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BH Macro Limited and Hansa Investment, you can compare the effects of market volatilities on BH Macro and Hansa Investment 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 BH Macro with a short position of Hansa Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Macro and Hansa Investment.
Diversification Opportunities for BH Macro and Hansa Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BHMU and Hansa is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited and Hansa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Investment and BH Macro 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 BH Macro Limited are associated (or correlated) with Hansa Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Investment has no effect on the direction of BH Macro i.e., BH Macro and Hansa Investment go up and down completely randomly.
Pair Corralation between BH Macro and Hansa Investment
Assuming the 90 days trading horizon BH Macro Limited is expected to under-perform the Hansa Investment. But the stock apears to be less risky and, when comparing its historical volatility, BH Macro Limited is 1.13 times less risky than Hansa Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Hansa Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,394 in Hansa Investment on August 29, 2024 and sell it today you would earn a total of 4,006 from holding Hansa Investment or generate 23.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BH Macro Limited vs. Hansa Investment
Performance |
| Timeline |
| BH Macro Limited |
| Hansa Investment |
BH Macro and Hansa Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Macro and Hansa Investment
The main advantage of trading using opposite BH Macro and Hansa Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro position performs unexpectedly, Hansa Investment 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 Hansa Investment will offset losses from the drop in Hansa Investment's long position.| BH Macro vs. Toyota Motor Corp | BH Macro vs. Lendinvest PLC | BH Macro vs. Neometals | BH Macro vs. Coor Service Management |
| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. Intermediate Capital Group | Hansa Investment vs. FC Investment Trust | Hansa Investment vs. Polar Capital Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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