Correlation Between BHP Group and Bayhorse Silver
Can any of the company-specific risk be diversified away by investing in both BHP Group and Bayhorse Silver 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 Bayhorse Silver 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 Bayhorse Silver, you can compare the effects of market volatilities on BHP Group and Bayhorse Silver 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 Bayhorse Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Bayhorse Silver.
Diversification Opportunities for BHP Group and Bayhorse Silver
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and Bayhorse is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Bayhorse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayhorse Silver 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 Bayhorse Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayhorse Silver has no effect on the direction of BHP Group i.e., BHP Group and Bayhorse Silver go up and down completely randomly.
Pair Corralation between BHP Group and Bayhorse Silver
Considering the 90-day investment horizon BHP Group Limited is expected to generate 0.1 times more return on investment than Bayhorse Silver. However, BHP Group Limited is 10.12 times less risky than Bayhorse Silver. It trades about 0.04 of its potential returns per unit of risk. Bayhorse Silver is currently generating about -0.05 per unit of risk. If you would invest 4,881 in BHP Group Limited on November 4, 2024 and sell it today you would earn a total of 34.00 from holding BHP Group Limited or generate 0.7% 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. Bayhorse Silver
Performance |
| Timeline |
| BHP Group Limited |
| Bayhorse Silver |
BHP Group and Bayhorse Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Bayhorse Silver
The main advantage of trading using opposite BHP Group and Bayhorse Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Bayhorse Silver 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 Bayhorse Silver will offset losses from the drop in Bayhorse Silver's long position.| BHP Group vs. Vale SA ADR | BHP Group vs. Teck Resources Ltd | BHP Group vs. Lithium Americas Corp | BHP Group vs. MP Materials Corp |
| Bayhorse Silver vs. Golden Lake Exploration | Bayhorse Silver vs. Transition Metals Corp | Bayhorse Silver vs. Vendetta Mining Corp | Bayhorse Silver vs. Commerce Resources Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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