Correlation Between OOhMedia and BHP Group
Can any of the company-specific risk be diversified away by investing in both OOhMedia 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 OOhMedia and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between oOhMedia and BHP Group Limited, you can compare the effects of market volatilities on OOhMedia 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 OOhMedia with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and BHP Group.
Diversification Opportunities for OOhMedia and BHP Group
Modest diversification
The 3 months correlation between OOhMedia and BHP is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia 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 OOhMedia 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 oOhMedia 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 OOhMedia i.e., OOhMedia and BHP Group go up and down completely randomly.
Pair Corralation between OOhMedia and BHP Group
Assuming the 90 days trading horizon oOhMedia is expected to under-perform the BHP Group. In addition to that, OOhMedia is 1.67 times more volatile than BHP Group Limited. It trades about 0.0 of its total potential returns per unit of risk. BHP Group Limited is currently generating about -0.01 per unit of volatility. If you would invest 4,288 in BHP Group Limited on November 2, 2024 and sell it today you would lose (340.00) from holding BHP Group Limited or give up 7.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
oOhMedia vs. BHP Group Limited
Performance |
| Timeline |
| oOhMedia |
| BHP Group Limited |
OOhMedia and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOhMedia and BHP Group
The main advantage of trading using opposite OOhMedia and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOhMedia 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.| OOhMedia vs. Andean Silver Limited | OOhMedia vs. Talisman Mining | OOhMedia vs. Charter Hall Retail | OOhMedia vs. Australian Agricultural |
| BHP Group vs. Bell Financial Group | BHP Group vs. MotorCycle Holdings | BHP Group vs. Stelar Metals | BHP Group vs. Insignia Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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