Correlation Between Boliden AB and BHP Group
Can any of the company-specific risk be diversified away by investing in both Boliden AB and BHP Group 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 Boliden AB and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and BHP Group Limited, you can compare the effects of market volatilities on Boliden AB and BHP Group 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 Boliden AB with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and BHP Group.
Diversification Opportunities for Boliden AB and BHP Group
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boliden and BHP is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited and Boliden AB 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 Boliden AB are associated (or correlated) with BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Boliden AB i.e., Boliden AB and BHP Group go up and down completely randomly.
Pair Corralation between Boliden AB and BHP Group
If you would invest 3,465 in Boliden AB on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Boliden AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Boliden AB vs. BHP Group Limited
Performance |
| Timeline |
| Boliden AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BHP Group Limited |
Boliden AB and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and BHP Group
The main advantage of trading using opposite Boliden AB and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.| Boliden AB vs. Avarone Metals | Boliden AB vs. Aurelia Metals Limited | Boliden AB vs. Adriatic Metals PLC | Boliden AB vs. Huntsman Exploration |
| BHP Group vs. Vale SA ADR | BHP Group vs. Teck Resources Ltd | BHP Group vs. Lithium Americas Corp | BHP Group vs. MP Materials 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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