Correlation Between Alphabet and BH Macro
Can any of the company-specific risk be diversified away by investing in both Alphabet and BH Macro 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 Alphabet and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and BH Macro Limited, you can compare the effects of market volatilities on Alphabet and BH Macro 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 Alphabet with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and BH Macro.
Diversification Opportunities for Alphabet and BH Macro
Modest diversification
The 3 months correlation between Alphabet and BHMU is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Alphabet i.e., Alphabet and BH Macro go up and down completely randomly.
Pair Corralation between Alphabet and BH Macro
Given the investment horizon of 90 days Alphabet is expected to generate 29.28 times less return on investment than BH Macro. In addition to that, Alphabet is 1.45 times more volatile than BH Macro Limited. It trades about 0.0 of its total potential returns per unit of risk. BH Macro Limited is currently generating about 0.15 per unit of volatility. If you would invest 380.00 in BH Macro Limited on August 26, 2024 and sell it today you would earn a total of 17.00 from holding BH Macro Limited or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. BH Macro Limited
Performance |
| Timeline |
| Alphabet Class C |
| BH Macro Limited |
Alphabet and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and BH Macro
The main advantage of trading using opposite Alphabet and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.The idea behind Alphabet Inc Class C and BH Macro Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BH Macro vs. Westlake Chemical Corp | BH Macro vs. Thor Mining PLC | BH Macro vs. McEwen Mining | BH Macro vs. Gaztransport et Technigaz |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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