Correlation Between BHP Group and Kneomedia
Can any of the company-specific risk be diversified away by investing in both BHP Group and Kneomedia 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 Kneomedia 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 Kneomedia, you can compare the effects of market volatilities on BHP Group and Kneomedia 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 Kneomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Kneomedia.
Diversification Opportunities for BHP Group and Kneomedia
Pay attention - limited upside
The 3 months correlation between BHP and Kneomedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Kneomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kneomedia 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 Kneomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kneomedia has no effect on the direction of BHP Group i.e., BHP Group and Kneomedia go up and down completely randomly.
Pair Corralation between BHP Group and Kneomedia
Assuming the 90 days trading horizon BHP Group Limited is expected to under-perform the Kneomedia. But the stock apears to be less risky and, when comparing its historical volatility, BHP Group Limited is 3.36 times less risky than Kneomedia. The stock trades about -0.02 of its potential returns per unit of risk. The Kneomedia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Kneomedia on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Kneomedia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Kneomedia
Performance |
| Timeline |
| BHP Group Limited |
| Kneomedia |
BHP Group and Kneomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Kneomedia
The main advantage of trading using opposite BHP Group and Kneomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Kneomedia 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 Kneomedia will offset losses from the drop in Kneomedia's long position.| BHP Group vs. Auctus Alternative Investments | BHP Group vs. Oneview Healthcare PLC | BHP Group vs. A1 Investments Resources | BHP Group vs. Carlton Investments |
| Kneomedia vs. Pinnacle Investment Management | Kneomedia vs. Australian Agricultural | Kneomedia vs. Ainsworth Game Technology | Kneomedia vs. Nufarm Finance NZ |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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