Correlation Between BH Macro and MG Plc
Can any of the company-specific risk be diversified away by investing in both BH Macro and MG 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 MG 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 MG Plc, you can compare the effects of market volatilities on BH Macro and MG 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 MG Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Macro and MG Plc.
Diversification Opportunities for BH Macro and MG Plc
Very good diversification
The 3 months correlation between BHMU and MNG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of BH Macro i.e., BH Macro and MG Plc go up and down completely randomly.
Pair Corralation between BH Macro and MG Plc
Assuming the 90 days trading horizon BH Macro Limited is expected to generate 1.27 times more return on investment than MG Plc. However, BH Macro is 1.27 times more volatile than MG Plc. It trades about 0.22 of its potential returns per unit of risk. MG Plc is currently generating about -0.06 per unit of risk. If you would invest 382.00 in BH Macro Limited on August 29, 2024 and sell it today you would earn a total of 26.00 from holding BH Macro Limited or generate 6.81% 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. MG Plc
Performance |
| Timeline |
| BH Macro Limited |
| MG Plc |
BH Macro and MG Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Macro and MG Plc
The main advantage of trading using opposite BH Macro and MG Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro position performs unexpectedly, MG 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 MG Plc will offset losses from the drop in MG Plc's long position.| BH Macro vs. Toyota Motor Corp | BH Macro vs. Lendinvest PLC | BH Macro vs. Neometals | BH Macro vs. Coor Service Management |
| MG Plc vs. Norman Broadbent Plc | MG Plc vs. Kaufman Et Broad | MG Plc vs. Broadcom | MG Plc vs. Zoom Video Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |