Correlation Between BHP Group and Commander Resources
Can any of the company-specific risk be diversified away by investing in both BHP Group and Commander Resources 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 Commander Resources 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 Commander Resources, you can compare the effects of market volatilities on BHP Group and Commander Resources 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 Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Commander Resources.
Diversification Opportunities for BHP Group and Commander Resources
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and Commander is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources 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 Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of BHP Group i.e., BHP Group and Commander Resources go up and down completely randomly.
Pair Corralation between BHP Group and Commander Resources
If you would invest 5.00 in Commander Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Commander Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BHP Group Limited vs. Commander Resources
Performance |
| Timeline |
| BHP Group Limited |
| Commander Resources |
BHP Group and Commander Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Commander Resources
The main advantage of trading using opposite BHP Group and Commander Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Commander Resources 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 Commander Resources will offset losses from the drop in Commander Resources' 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 |
| Commander Resources vs. Themac Resources Group | Commander Resources vs. East Africa Metals | Commander Resources vs. Forsys Metals Corp | Commander Resources vs. American CuMo 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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