Correlation Between BHP Group and ANGLER GAMING

Can any of the company-specific risk be diversified away by investing in both BHP Group and ANGLER GAMING 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 BHP Group and ANGLER GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BHP Group Limited and ANGLER GAMING PLC, you can compare the effects of market volatilities on BHP Group and ANGLER GAMING 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 BHP Group with a short position of ANGLER GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and ANGLER GAMING.

Diversification Opportunities for BHP Group and ANGLER GAMING

0.1

Correlation Coefficient

BHP Group  ANGLER GAMING

Average diversification

The 3 months correlation between BHP and ANGLER is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and ANGLER GAMING PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLER GAMING PLC and BHP Group 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 BHP Group Limited are associated (or correlated) with ANGLER GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLER GAMING PLC has no effect on the direction of BHP Group i.e., BHP Group and ANGLER GAMING go up and down completely randomly.

Pair Corralation between BHP Group and ANGLER GAMING

Assuming the 90 days horizon BHP Group Limited is expected to generate 0.45 times more return on investment than ANGLER GAMING. However, BHP Group Limited is 2.2 times less risky than ANGLER GAMING. It trades about 0.09 of its potential returns per unit of risk. ANGLER GAMING PLC is currently generating about -0.01 per unit of risk. If you would invest  4,526  in BHP Group Limited on September 4, 2024 and sell it today you would earn a total of  464.00  from holding BHP Group Limited or generate 10.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

BHP Group Limited  vs.  ANGLER GAMING PLC

BHP Group Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BHP Group Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BHP Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ANGLER GAMING PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLER GAMING PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ANGLER GAMING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BHP Group and ANGLER GAMING

The main advantage of trading using opposite BHP Group and ANGLER GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, ANGLER GAMING 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 ANGLER GAMING will offset losses from the drop in ANGLER GAMING's long position.

The idea behind BHP Group Limited and ANGLER GAMING PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stocks Directory module to find actively traded stocks across global markets.