Correlation Between BHP Group and Silver Standard
Can any of the company-specific risk be diversified away by investing in both BHP Group and Silver Standard 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 Silver Standard 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 Silver Standard Resources, you can compare the effects of market volatilities on BHP Group and Silver Standard 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 Silver Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Silver Standard.
Diversification Opportunities for BHP Group and Silver Standard
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and Silver is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and Silver Standard Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Standard Resources 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 Silver Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Standard Resources has no effect on the direction of BHP Group i.e., BHP Group and Silver Standard go up and down completely randomly.
Pair Corralation between BHP Group and Silver Standard
If you would invest 0.00 in Silver Standard Resources on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Silver Standard Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.22% |
| Values | Daily Returns |
BHP Group Limited vs. Silver Standard Resources
Performance |
| Timeline |
| BHP Group Limited |
| Silver Standard Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BHP Group and Silver Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and Silver Standard
The main advantage of trading using opposite BHP Group and Silver Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, Silver Standard 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 Silver Standard will offset losses from the drop in Silver Standard's long position.| BHP Group vs. Qubec Nickel Corp | BHP Group vs. American Rare Earths | BHP Group vs. Cypress Development Corp | BHP Group vs. Jervois Mining |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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