Correlation Between BHP Group and CPFL Energia
Can any of the company-specific risk be diversified away by investing in both BHP Group and CPFL Energia 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 CPFL Energia 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 CPFL Energia SA, you can compare the effects of market volatilities on BHP Group and CPFL Energia 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 CPFL Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and CPFL Energia.
Diversification Opportunities for BHP Group and CPFL Energia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and CPFL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and CPFL Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPFL Energia SA 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 CPFL Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPFL Energia SA has no effect on the direction of BHP Group i.e., BHP Group and CPFL Energia go up and down completely randomly.
Pair Corralation between BHP Group and CPFL Energia
If you would invest 5,445 in BHP Group Limited on January 26, 2024 and sell it today you would earn a total of 479.00 from holding BHP Group Limited or generate 8.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
BHP Group Limited vs. CPFL Energia SA
Performance |
Timeline |
BHP Group Limited |
CPFL Energia SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BHP Group and CPFL Energia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BHP Group and CPFL Energia
The main advantage of trading using opposite BHP Group and CPFL Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, CPFL Energia 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 CPFL Energia will offset losses from the drop in CPFL Energia's long position.BHP Group vs. Skeena Resources | BHP Group vs. Materion | BHP Group vs. Fury Gold Mines | BHP Group vs. Eskay Mining Corp |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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