Correlation Between Edesa Holding and BHP Group
Can any of the company-specific risk be diversified away by investing in both Edesa Holding 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 Edesa Holding and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edesa Holding SA and BHP Group Limited, you can compare the effects of market volatilities on Edesa Holding 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 Edesa Holding with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edesa Holding and BHP Group.
Diversification Opportunities for Edesa Holding and BHP Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edesa and BHP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edesa Holding 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 Edesa Holding 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 Edesa Holding 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 Edesa Holding i.e., Edesa Holding and BHP Group go up and down completely randomly.
Pair Corralation between Edesa Holding and BHP Group
If you would invest 2,932,500 in BHP Group Limited on September 19, 2024 and sell it today you would lose (7,500) from holding BHP Group Limited or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edesa Holding SA vs. BHP Group Limited
Performance |
| Timeline |
| Edesa Holding SA |
| BHP Group Limited |
Edesa Holding and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edesa Holding and BHP Group
The main advantage of trading using opposite Edesa Holding and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edesa Holding 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.| Edesa Holding vs. Enel Generacion Costanera | Edesa Holding vs. Vista Energy, SAB | Edesa Holding vs. United States Steel | Edesa Holding vs. Pfizer Inc |
| BHP Group vs. Rio Tinto PLC | BHP Group vs. Edesa Holding SA | BHP Group vs. Longvie SA | BHP Group vs. Vista Energy, SAB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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