Correlation Between BHP Group and Sassy Resources
Can any of the company-specific risk be diversified away by investing in both BHP Group and Sassy 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 Sassy 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 Sassy Resources, you can compare the effects of market volatilities on BHP Group and Sassy 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 Sassy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Sassy Resources.
Diversification Opportunities for BHP Group and Sassy Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BHP and Sassy is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy 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 Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of BHP Group i.e., BHP Group and Sassy Resources go up and down completely randomly.
Pair Corralation between BHP Group and Sassy Resources
Considering the 90-day investment horizon BHP Group Limited is expected to under-perform the Sassy Resources. But the stock apears to be less risky and, when comparing its historical volatility, BHP Group Limited is 17.03 times less risky than Sassy Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Sassy Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Sassy Resources on August 29, 2024 and sell it today you would lose (9.03) from holding Sassy Resources or give up 60.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. Sassy Resources
Performance |
| Timeline |
| BHP Group Limited |
| Sassy Resources |
BHP Group and Sassy Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Sassy Resources
The main advantage of trading using opposite BHP Group and Sassy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Sassy 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 Sassy Resources will offset losses from the drop in Sassy 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 |
| Sassy Resources vs. Pan Global Resources | Sassy Resources vs. Tower Resources | Sassy Resources vs. Metals X Limited | Sassy Resources vs. Nevada King Gold |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |