Correlation Between B2Gold Corp and Huntsman
Can any of the company-specific risk be diversified away by investing in both B2Gold Corp and Huntsman 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 Huntsman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B2Gold Corp and Huntsman, you can compare the effects of market volatilities on B2Gold Corp and Huntsman 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 Huntsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of B2Gold Corp and Huntsman.
Diversification Opportunities for B2Gold Corp and Huntsman
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between B2Gold and Huntsman is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding B2Gold Corp and Huntsman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman 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 Huntsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman has no effect on the direction of B2Gold Corp i.e., B2Gold Corp and Huntsman go up and down completely randomly.
Pair Corralation between B2Gold Corp and Huntsman
Considering the 90-day investment horizon B2Gold Corp is expected to generate 1.53 times more return on investment than Huntsman. However, B2Gold Corp is 1.53 times more volatile than Huntsman. It trades about 0.03 of its potential returns per unit of risk. Huntsman is currently generating about -0.08 per unit of risk. If you would invest 276.00 in B2Gold Corp on August 26, 2024 and sell it today you would earn a total of 16.00 from holding B2Gold Corp or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B2Gold Corp vs. Huntsman
Performance |
| Timeline |
| B2Gold Corp |
| Huntsman |
B2Gold Corp and Huntsman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B2Gold Corp and Huntsman
The main advantage of trading using opposite B2Gold Corp and Huntsman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B2Gold Corp position performs unexpectedly, Huntsman 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 Huntsman will offset losses from the drop in Huntsman's long position.| B2Gold Corp vs. Sandstorm Gold Ltd | B2Gold Corp vs. Kinross Gold | B2Gold Corp vs. Alamos Gold | B2Gold Corp vs. Fortuna Silver Mines |
| Huntsman vs. Valhi Inc | Huntsman vs. Lsb Industries | Huntsman vs. Westlake Chemical Partners | Huntsman vs. Braskem SA Class |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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