Correlation Between BHP Group and TTG Fintech
Can any of the company-specific risk be diversified away by investing in both BHP Group and TTG Fintech 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 TTG Fintech 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 TTG Fintech, you can compare the effects of market volatilities on BHP Group and TTG Fintech 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 TTG Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and TTG Fintech.
Diversification Opportunities for BHP Group and TTG Fintech
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BHP and TTG is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and TTG Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTG Fintech 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 TTG Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTG Fintech has no effect on the direction of BHP Group i.e., BHP Group and TTG Fintech go up and down completely randomly.
Pair Corralation between BHP Group and TTG Fintech
Assuming the 90 days trading horizon BHP Group Limited is expected to under-perform the TTG Fintech. But the stock apears to be less risky and, when comparing its historical volatility, BHP Group Limited is 3.41 times less risky than TTG Fintech. The stock trades about -0.03 of its potential returns per unit of risk. The TTG Fintech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.60 in TTG Fintech on August 25, 2024 and sell it today you would earn a total of 0.00 from holding TTG Fintech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. TTG Fintech
Performance |
| Timeline |
| BHP Group Limited |
| TTG Fintech |
BHP Group and TTG Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and TTG Fintech
The main advantage of trading using opposite BHP Group and TTG Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, TTG Fintech 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 TTG Fintech will offset losses from the drop in TTG Fintech's long position.| BHP Group vs. Super Retail Group | BHP Group vs. Eagle Mountain Mining | BHP Group vs. Wt Financial Group | BHP Group vs. Pioneer Credit |
| TTG Fintech vs. Aneka Tambang Tbk | TTG Fintech vs. BHP Group Limited | TTG Fintech vs. Rio Tinto | TTG Fintech vs. Macquarie Group Ltd |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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