Correlation Between Carmat SA and BHP Group
Can any of the company-specific risk be diversified away by investing in both Carmat SA 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 Carmat SA and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and BHP Group Limited, you can compare the effects of market volatilities on Carmat SA 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 Carmat SA with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and BHP Group.
Diversification Opportunities for Carmat SA and BHP Group
Pay attention - limited upside
The 3 months correlation between Carmat and BHP is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA 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 Carmat SA 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 Carmat SA 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 Carmat SA i.e., Carmat SA and BHP Group go up and down completely randomly.
Pair Corralation between Carmat SA and BHP Group
Assuming the 90 days horizon Carmat SA is expected to under-perform the BHP Group. In addition to that, Carmat SA is 2.51 times more volatile than BHP Group Limited. It trades about -0.37 of its total potential returns per unit of risk. BHP Group Limited is currently generating about -0.15 per unit of volatility. If you would invest 2,640 in BHP Group Limited on August 28, 2024 and sell it today you would lose (130.00) from holding BHP Group Limited or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. BHP Group Limited
Performance |
| Timeline |
| Carmat SA |
| BHP Group Limited |
Carmat SA and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and BHP Group
The main advantage of trading using opposite Carmat SA and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA 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.| Carmat SA vs. American Eagle Outfitters | Carmat SA vs. Computer And Technologies | Carmat SA vs. VARIOUS EATERIES LS | Carmat SA vs. FANDIFI TECHNOLOGY P |
| BHP Group vs. Superior Plus Corp | BHP Group vs. NMI Holdings | BHP Group vs. Origin Agritech | BHP Group vs. SIVERS SEMICONDUCTORS AB |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |