Correlation Between Gentor Resources and BHP Group
Can any of the company-specific risk be diversified away by investing in both Gentor Resources 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 Gentor Resources and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentor Resources and BHP Group Limited, you can compare the effects of market volatilities on Gentor Resources 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 Gentor Resources with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentor Resources and BHP Group.
Diversification Opportunities for Gentor Resources and BHP Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gentor and BHP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gentor Resources 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 Gentor Resources 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 Gentor Resources 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 Gentor Resources i.e., Gentor Resources and BHP Group go up and down completely randomly.
Pair Corralation between Gentor Resources and BHP Group
Assuming the 90 days horizon Gentor Resources is expected to under-perform the BHP Group. In addition to that, Gentor Resources is 1.96 times more volatile than BHP Group Limited. It trades about -0.01 of its total potential returns per unit of risk. BHP Group Limited is currently generating about 0.03 per unit of volatility. If you would invest 2,574 in BHP Group Limited on January 19, 2024 and sell it today you would earn a total of 346.00 from holding BHP Group Limited or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentor Resources vs. BHP Group Limited
Performance |
| Timeline |
| Gentor Resources |
| BHP Group Limited |
Gentor Resources and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentor Resources and BHP Group
The main advantage of trading using opposite Gentor Resources and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentor Resources 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.| Gentor Resources vs. Alumina Limited | Gentor Resources vs. HUMANA INC | Gentor Resources vs. Aquagold International | Gentor Resources vs. Spring Valley Acquisition |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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