Correlation Between Pacific Horizon and BH Macro
Can any of the company-specific risk be diversified away by investing in both Pacific Horizon 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 Pacific Horizon and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Horizon Investment and BH Macro Limited, you can compare the effects of market volatilities on Pacific Horizon 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 Pacific Horizon with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Horizon and BH Macro.
Diversification Opportunities for Pacific Horizon and BH Macro
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and BHMG is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Horizon Investment 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 Pacific Horizon 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 Pacific Horizon Investment 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 Pacific Horizon i.e., Pacific Horizon and BH Macro go up and down completely randomly.
Pair Corralation between Pacific Horizon and BH Macro
Assuming the 90 days trading horizon Pacific Horizon Investment is expected to under-perform the BH Macro. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Horizon Investment is 2.1 times less risky than BH Macro. The stock trades about -0.06 of its potential returns per unit of risk. The BH Macro Limited is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 37,200 in BH Macro Limited on August 29, 2024 and sell it today you would earn a total of 3,000 from holding BH Macro Limited or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Horizon Investment vs. BH Macro Limited
Performance |
| Timeline |
| Pacific Horizon Inve |
| BH Macro Limited |
Pacific Horizon and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Horizon and BH Macro
The main advantage of trading using opposite Pacific Horizon and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Horizon 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.| Pacific Horizon vs. Toyota Motor Corp | Pacific Horizon vs. Lendinvest PLC | Pacific Horizon vs. Neometals | Pacific Horizon vs. Coor Service Management |
| BH Macro vs. Fortune Brands Home | BH Macro vs. OneSavings Bank PLC | BH Macro vs. Pacific Horizon Investment | BH Macro vs. Cairn Homes PLC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |