Correlation Between B2Gold Corp and Hongli Group
Can any of the company-specific risk be diversified away by investing in both B2Gold Corp and Hongli 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 B2Gold Corp and Hongli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B2Gold Corp and Hongli Group Ordinary, you can compare the effects of market volatilities on B2Gold Corp and Hongli 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 B2Gold Corp with a short position of Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of B2Gold Corp and Hongli Group.
Diversification Opportunities for B2Gold Corp and Hongli Group
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between B2Gold and Hongli is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding B2Gold Corp and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary and B2Gold Corp 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 B2Gold Corp are associated (or correlated) with Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of B2Gold Corp i.e., B2Gold Corp and Hongli Group go up and down completely randomly.
Pair Corralation between B2Gold Corp and Hongli Group
Considering the 90-day investment horizon B2Gold Corp is expected to generate 0.74 times more return on investment than Hongli Group. However, B2Gold Corp is 1.35 times less risky than Hongli Group. It trades about 0.12 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about 0.08 per unit of risk. If you would invest 242.00 in B2Gold Corp on November 21, 2024 and sell it today you would earn a total of 12.00 from holding B2Gold Corp or generate 4.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
B2Gold Corp vs. Hongli Group Ordinary
Performance |
Timeline |
B2Gold Corp |
Hongli Group Ordinary |
B2Gold Corp and Hongli Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with B2Gold Corp and Hongli Group
The main advantage of trading using opposite B2Gold Corp and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B2Gold Corp position performs unexpectedly, Hongli 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 Hongli Group will offset losses from the drop in Hongli Group's long position.B2Gold Corp vs. Sandstorm Gold Ltd | ||
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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