Correlation Between BHP Group and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both BHP Group and Grupo Concesionario 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 Grupo Concesionario 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 Grupo Concesionario del, you can compare the effects of market volatilities on BHP Group and Grupo Concesionario 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 Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Grupo Concesionario.
Diversification Opportunities for BHP Group and Grupo Concesionario
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BHP and Grupo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del 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 Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of BHP Group i.e., BHP Group and Grupo Concesionario go up and down completely randomly.
Pair Corralation between BHP Group and Grupo Concesionario
Assuming the 90 days trading horizon BHP Group is expected to generate 45.29 times less return on investment than Grupo Concesionario. But when comparing it to its historical volatility, BHP Group Limited is 1.36 times less risky than Grupo Concesionario. It trades about 0.0 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 109,000 in Grupo Concesionario del on September 19, 2024 and sell it today you would earn a total of 3,000 from holding Grupo Concesionario del or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Grupo Concesionario del
Performance |
| Timeline |
| BHP Group Limited |
| Grupo Concesionario del |
BHP Group and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Grupo Concesionario
The main advantage of trading using opposite BHP Group and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario's long position.| BHP Group vs. Rio Tinto PLC | BHP Group vs. Vale SA | BHP Group vs. Edesa Holding SA | BHP Group vs. Longvie SA |
| Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Compania de Transporte | Grupo Concesionario vs. Transportadora de Gas | Grupo Concesionario vs. Harmony Gold Mining |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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