Correlation Between BHP and Compaa Minera
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By analyzing existing cross correlation between BHP Group and Compaa Minera Autln, you can compare the effects of market volatilities on BHP and Compaa Minera 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 with a short position of Compaa Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP and Compaa Minera.
Diversification Opportunities for BHP and Compaa Minera
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BHP and Compaa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group and Compaa Minera Autln in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compaa Minera Autln and BHP 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 are associated (or correlated) with Compaa Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compaa Minera Autln has no effect on the direction of BHP i.e., BHP and Compaa Minera go up and down completely randomly.
Pair Corralation between BHP and Compaa Minera
Assuming the 90 days trading horizon BHP Group is expected to generate 0.72 times more return on investment than Compaa Minera. However, BHP Group is 1.4 times less risky than Compaa Minera. It trades about 0.01 of its potential returns per unit of risk. Compaa Minera Autln is currently generating about -0.05 per unit of risk. If you would invest 112,189 in BHP Group on September 3, 2024 and sell it today you would earn a total of 1,731 from holding BHP Group or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BHP Group vs. Compaa Minera Autln
Performance |
| Timeline |
| BHP Group |
| Compaa Minera Autln |
BHP and Compaa Minera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP and Compaa Minera
The main advantage of trading using opposite BHP and Compaa Minera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP position performs unexpectedly, Compaa Minera 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 Compaa Minera will offset losses from the drop in Compaa Minera's long position.| BHP vs. New Oriental Education | BHP vs. Grupo Carso SAB | BHP vs. Grupo Sports World | BHP vs. First Republic Bank |
| Compaa Minera vs. Sony Group | Compaa Minera vs. Banco Actinver SA | Compaa Minera vs. Citigroup | Compaa Minera vs. JPMorgan Chase Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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