Correlation Between BHP Group and Event Hospitality
Can any of the company-specific risk be diversified away by investing in both BHP Group and Event Hospitality 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 BHP Group and Event Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group Limited and Event Hospitality and, you can compare the effects of market volatilities on BHP Group and Event Hospitality 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 BHP Group with a short position of Event Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Event Hospitality.
Diversification Opportunities for BHP Group and Event Hospitality
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BHP and Event is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Event Hospitality and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Event Hospitality and BHP Group 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 BHP Group Limited are associated (or correlated) with Event Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Event Hospitality has no effect on the direction of BHP Group i.e., BHP Group and Event Hospitality go up and down completely randomly.
Pair Corralation between BHP Group and Event Hospitality
Assuming the 90 days trading horizon BHP Group Limited is expected to under-perform the Event Hospitality. In addition to that, BHP Group is 1.08 times more volatile than Event Hospitality and. It trades about -0.29 of its total potential returns per unit of risk. Event Hospitality and is currently generating about 0.19 per unit of volatility. If you would invest 1,098 in Event Hospitality and on August 31, 2024 and sell it today you would earn a total of 47.00 from holding Event Hospitality and or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Event Hospitality and
Performance |
| Timeline |
| BHP Group Limited |
| Event Hospitality |
BHP Group and Event Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Event Hospitality
The main advantage of trading using opposite BHP Group and Event Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Event Hospitality 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 Event Hospitality will offset losses from the drop in Event Hospitality's long position.| BHP Group vs. Future Generation Global | BHP Group vs. Rubicon Water | BHP Group vs. Kinatico | BHP Group vs. Jade Gas Holdings |
| Event Hospitality vs. Aneka Tambang Tbk | Event Hospitality vs. Woolworths | Event Hospitality vs. Commonwealth Bank | Event Hospitality vs. BHP Group Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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