Correlation Between BH Macro and Mindflair Plc
Can any of the company-specific risk be diversified away by investing in both BH Macro and Mindflair Plc 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 Mindflair Plc 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 Mindflair Plc, you can compare the effects of market volatilities on BH Macro and Mindflair Plc 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 Mindflair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Macro and Mindflair Plc.
Diversification Opportunities for BH Macro and Mindflair Plc
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BHMU and Mindflair is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair Plc 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of BH Macro i.e., BH Macro and Mindflair Plc go up and down completely randomly.
Pair Corralation between BH Macro and Mindflair Plc
Assuming the 90 days trading horizon BH Macro Limited is expected to generate 0.92 times more return on investment than Mindflair Plc. However, BH Macro Limited is 1.09 times less risky than Mindflair Plc. It trades about 0.15 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.08 per unit of risk. If you would invest 380.00 in BH Macro Limited on August 26, 2024 and sell it today you would earn a total of 17.00 from holding BH Macro Limited or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BH Macro Limited vs. Mindflair Plc
Performance |
| Timeline |
| BH Macro Limited |
| Mindflair Plc |
BH Macro and Mindflair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Macro and Mindflair Plc
The main advantage of trading using opposite BH Macro and Mindflair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro position performs unexpectedly, Mindflair Plc 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 Mindflair Plc will offset losses from the drop in Mindflair Plc's long position.| BH Macro vs. Westlake Chemical Corp | BH Macro vs. Thor Mining PLC | BH Macro vs. McEwen Mining | BH Macro vs. Gaztransport et Technigaz |
| Mindflair Plc vs. CATCo Reinsurance Opportunities | Mindflair Plc vs. BH Macro Limited | Mindflair Plc vs. TMT Investments PLC | Mindflair Plc vs. Intermediate Capital Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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