Correlation Between Epsilon Healthcare and BHP Group
Can any of the company-specific risk be diversified away by investing in both Epsilon Healthcare 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 Epsilon Healthcare and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Healthcare and BHP Group Limited, you can compare the effects of market volatilities on Epsilon Healthcare 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 Epsilon Healthcare with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Healthcare and BHP Group.
Diversification Opportunities for Epsilon Healthcare and BHP Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Epsilon and BHP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Healthcare 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 Epsilon Healthcare 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 Epsilon Healthcare 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 Epsilon Healthcare i.e., Epsilon Healthcare and BHP Group go up and down completely randomly.
Pair Corralation between Epsilon Healthcare and BHP Group
If you would invest 3,990 in BHP Group Limited on October 24, 2024 and sell it today you would earn a total of 71.00 from holding BHP Group Limited or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epsilon Healthcare vs. BHP Group Limited
Performance |
| Timeline |
| Epsilon Healthcare |
| BHP Group Limited |
Epsilon Healthcare and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Healthcare and BHP Group
The main advantage of trading using opposite Epsilon Healthcare and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Healthcare 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.| Epsilon Healthcare vs. High Tech Metals | Epsilon Healthcare vs. Anteris Technologies | Epsilon Healthcare vs. Technology One | Epsilon Healthcare vs. RLF AgTech |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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