Correlation Between Hansen Technologies and BHP Group
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies 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 Hansen Technologies and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansen Technologies and BHP Group Limited, you can compare the effects of market volatilities on Hansen Technologies 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 Hansen Technologies with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and BHP Group.
Diversification Opportunities for Hansen Technologies and BHP Group
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hansen and BHP is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies i.e., Hansen Technologies and BHP Group go up and down completely randomly.
Pair Corralation between Hansen Technologies and BHP Group
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 1.29 times more return on investment than BHP Group. However, Hansen Technologies is 1.29 times more volatile than BHP Group Limited. It trades about 0.02 of its potential returns per unit of risk. BHP Group Limited is currently generating about 0.01 per unit of risk. If you would invest 499.00 in Hansen Technologies on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Hansen Technologies or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. BHP Group Limited
Performance |
| Timeline |
| Hansen Technologies |
| BHP Group Limited |
Hansen Technologies and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and BHP Group
The main advantage of trading using opposite Hansen Technologies and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies 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.| Hansen Technologies vs. Aneka Tambang Tbk | Hansen Technologies vs. BHP Group Limited | Hansen Technologies vs. Commonwealth Bank | Hansen Technologies vs. Commonwealth Bank of |
| BHP Group vs. Northern Star Resources | BHP Group vs. Evolution Mining | BHP Group vs. Bluescope Steel | BHP Group vs. Sandfire Resources NL |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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