Correlation Between BHP Group and Maggie Beer
Can any of the company-specific risk be diversified away by investing in both BHP Group and Maggie Beer 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 Maggie Beer 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 Maggie Beer Holdings, you can compare the effects of market volatilities on BHP Group and Maggie Beer 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 Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Maggie Beer.
Diversification Opportunities for BHP Group and Maggie Beer
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BHP and Maggie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings 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 Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of BHP Group i.e., BHP Group and Maggie Beer go up and down completely randomly.
Pair Corralation between BHP Group and Maggie Beer
Assuming the 90 days trading horizon BHP Group Limited is expected to generate 0.26 times more return on investment than Maggie Beer. However, BHP Group Limited is 3.91 times less risky than Maggie Beer. It trades about -0.01 of its potential returns per unit of risk. Maggie Beer Holdings is currently generating about -0.01 per unit of risk. If you would invest 4,164 in BHP Group Limited on August 27, 2024 and sell it today you would lose (148.00) from holding BHP Group Limited or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Maggie Beer Holdings
Performance |
| Timeline |
| BHP Group Limited |
| Maggie Beer Holdings |
BHP Group and Maggie Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Maggie Beer
The main advantage of trading using opposite BHP Group and Maggie Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Maggie Beer 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 Maggie Beer will offset losses from the drop in Maggie Beer's long position.| BHP Group vs. IDP Education | BHP Group vs. EMvision Medical Devices | BHP Group vs. Readytech Holdings | BHP Group vs. Zoom2u Technologies |
| Maggie Beer vs. Aneka Tambang Tbk | Maggie Beer vs. BHP Group Limited | Maggie Beer vs. Commonwealth Bank of | Maggie Beer vs. Commonwealth Bank of |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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