Correlation Between Kibush Capital and BHP Group
Can any of the company-specific risk be diversified away by investing in both Kibush Capital 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 Kibush Capital and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kibush Capital Corp and BHP Group Limited, you can compare the effects of market volatilities on Kibush Capital 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 Kibush Capital with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kibush Capital and BHP Group.
Diversification Opportunities for Kibush Capital and BHP Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kibush and BHP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kibush Capital Corp 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 Kibush Capital 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 Kibush Capital Corp 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 Kibush Capital i.e., Kibush Capital and BHP Group go up and down completely randomly.
Pair Corralation between Kibush Capital and BHP Group
If you would invest 5,634 in BHP Group Limited on January 24, 2024 and sell it today you would earn a total of 217.00 from holding BHP Group Limited or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kibush Capital Corp vs. BHP Group Limited
Performance |
| Timeline |
| Kibush Capital Corp |
| BHP Group Limited |
Kibush Capital and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kibush Capital and BHP Group
The main advantage of trading using opposite Kibush Capital and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kibush Capital 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.The idea behind Kibush Capital Corp and BHP Group Limited 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.| BHP Group vs. Vale SA ADR | BHP Group vs. Teck Resources Ltd | BHP Group vs. Lithium Americas Corp | BHP Group vs. MP Materials Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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