Correlation Between Banpu PCL and HMS Bergbau
Can any of the company-specific risk be diversified away by investing in both Banpu PCL and HMS Bergbau 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 Banpu PCL and HMS Bergbau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu PCL and HMS Bergbau AG, you can compare the effects of market volatilities on Banpu PCL and HMS Bergbau 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 Banpu PCL with a short position of HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu PCL and HMS Bergbau.
Diversification Opportunities for Banpu PCL and HMS Bergbau
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banpu and HMS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Banpu PCL and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG and Banpu PCL 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 Banpu PCL are associated (or correlated) with HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of Banpu PCL i.e., Banpu PCL and HMS Bergbau go up and down completely randomly.
Pair Corralation between Banpu PCL and HMS Bergbau
Assuming the 90 days trading horizon Banpu PCL is expected to generate 1.32 times less return on investment than HMS Bergbau. In addition to that, Banpu PCL is 4.33 times more volatile than HMS Bergbau AG. It trades about 0.03 of its total potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.16 per unit of volatility. If you would invest 2,620 in HMS Bergbau AG on September 12, 2024 and sell it today you would earn a total of 340.00 from holding HMS Bergbau AG or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banpu PCL vs. HMS Bergbau AG
Performance |
| Timeline |
| Banpu PCL |
| HMS Bergbau AG |
Banpu PCL and HMS Bergbau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu PCL and HMS Bergbau
The main advantage of trading using opposite Banpu PCL and HMS Bergbau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu PCL position performs unexpectedly, HMS Bergbau 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 HMS Bergbau will offset losses from the drop in HMS Bergbau's long position.| Banpu PCL vs. CarsalesCom | Banpu PCL vs. Charter Communications | Banpu PCL vs. Salesforce | Banpu PCL vs. MUTUIONLINE |
| HMS Bergbau vs. CHINA SHENHUA ENA | HMS Bergbau vs. China Coal Energy | HMS Bergbau vs. Yancoal Australia | HMS Bergbau vs. Banpu PCL |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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