Correlation Between South Star and BHP Group
Can any of the company-specific risk be diversified away by investing in both South Star 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 South Star and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and BHP Group Limited, you can compare the effects of market volatilities on South Star 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 South Star with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and BHP Group.
Diversification Opportunities for South Star and BHP Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between South and BHP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery 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 South Star 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 South Star Battery 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 South Star i.e., South Star and BHP Group go up and down completely randomly.
Pair Corralation between South Star and BHP Group
Assuming the 90 days horizon South Star Battery is expected to generate 0.94 times more return on investment than BHP Group. However, South Star Battery is 1.07 times less risky than BHP Group. It trades about -0.08 of its potential returns per unit of risk. BHP Group Limited is currently generating about -0.11 per unit of risk. If you would invest 44.00 in South Star Battery on August 29, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. BHP Group Limited
Performance |
| Timeline |
| South Star Battery |
| BHP Group Limited |
South Star and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and BHP Group
The main advantage of trading using opposite South Star and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star 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.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| BHP Group vs. Anglo American PLC | BHP Group vs. Avarone Metals | BHP Group vs. Huntsman Exploration | BHP Group vs. Aurelia Metals Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| 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 | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |