Correlation Between BHP Group and Chuangs China
Can any of the company-specific risk be diversified away by investing in both BHP Group and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on BHP Group and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Chuangs China.
Diversification Opportunities for BHP Group and Chuangs China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and Chuangs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of BHP Group i.e., BHP Group and Chuangs China go up and down completely randomly.
Pair Corralation between BHP Group and Chuangs China
If you would invest 4,700 in BHP Group Limited on October 22, 2024 and sell it today you would earn a total of 130.00 from holding BHP Group Limited or generate 2.77% 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. Chuangs China Investments
Performance |
| Timeline |
| BHP Group Limited |
| Chuangs China Investments |
BHP Group and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Chuangs China
The main advantage of trading using opposite BHP Group and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| BHP Group vs. EAT WELL INVESTMENT | BHP Group vs. Singapore Telecommunications Limited | BHP Group vs. ecotel communication ag | BHP Group vs. ECHO INVESTMENT ZY |
| Chuangs China vs. ARDAGH METAL PACDL 0001 | Chuangs China vs. Tradeweb Markets | Chuangs China vs. FLOW TRADERS LTD | Chuangs China vs. AUTO TRADER ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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