Correlation Between HMS Bergbau and Banpu PCL
Can any of the company-specific risk be diversified away by investing in both HMS Bergbau and Banpu PCL 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 HMS Bergbau and Banpu PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMS Bergbau AG and Banpu PCL, you can compare the effects of market volatilities on HMS Bergbau and Banpu PCL 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 HMS Bergbau with a short position of Banpu PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMS Bergbau and Banpu PCL.
Diversification Opportunities for HMS Bergbau and Banpu PCL
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between HMS and Banpu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HMS Bergbau AG and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL and HMS Bergbau 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 HMS Bergbau AG are associated (or correlated) with Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of HMS Bergbau i.e., HMS Bergbau and Banpu PCL go up and down completely randomly.
Pair Corralation between HMS Bergbau and Banpu PCL
Assuming the 90 days trading horizon HMS Bergbau AG is expected to generate 0.13 times more return on investment than Banpu PCL. However, HMS Bergbau AG is 7.45 times less risky than Banpu PCL. It trades about 0.14 of its potential returns per unit of risk. Banpu PCL is currently generating about 0.0 per unit of risk. If you would invest 2,840 in HMS Bergbau AG on September 5, 2024 and sell it today you would earn a total of 80.00 from holding HMS Bergbau AG or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HMS Bergbau AG vs. Banpu PCL
Performance |
| Timeline |
| HMS Bergbau AG |
| Banpu PCL |
HMS Bergbau and Banpu PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMS Bergbau and Banpu PCL
The main advantage of trading using opposite HMS Bergbau and Banpu PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMS Bergbau position performs unexpectedly, Banpu PCL 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 Banpu PCL will offset losses from the drop in Banpu PCL's long position.The idea behind HMS Bergbau AG and Banpu PCL 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.| Banpu PCL vs. Algonquin Power Utilities | Banpu PCL vs. Warner Music Group | Banpu PCL vs. Solstad Offshore ASA | Banpu PCL vs. BW OFFSHORE LTD |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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