Correlation Between BHP Group and Helium One
Can any of the company-specific risk be diversified away by investing in both BHP Group and Helium One 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 Helium One 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 Helium One Global, you can compare the effects of market volatilities on BHP Group and Helium One 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 Helium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Helium One.
Diversification Opportunities for BHP Group and Helium One
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BHP and Helium is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Helium One Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helium One Global 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 Helium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helium One Global has no effect on the direction of BHP Group i.e., BHP Group and Helium One go up and down completely randomly.
Pair Corralation between BHP Group and Helium One
Considering the 90-day investment horizon BHP Group Limited is expected to under-perform the Helium One. But the stock apears to be less risky and, when comparing its historical volatility, BHP Group Limited is 13.25 times less risky than Helium One. The stock trades about -0.26 of its potential returns per unit of risk. The Helium One Global is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Helium One Global on August 30, 2024 and sell it today you would earn a total of 0.40 from holding Helium One Global or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Helium One Global
Performance |
| Timeline |
| BHP Group Limited |
| Helium One Global |
BHP Group and Helium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Helium One
The main advantage of trading using opposite BHP Group and Helium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Helium One 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 Helium One will offset losses from the drop in Helium One'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 |
| Helium One vs. Bushveld Minerals Limited | Helium One vs. Aurelia Metals Limited | Helium One vs. Artemis Resources | Helium One vs. Ascendant Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |