Correlation Between BHP and La Z
Can any of the company-specific risk be diversified away by investing in both BHP and La Z 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 and La Z into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group and La Z Boy Incorporated, you can compare the effects of market volatilities on BHP and La Z 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 with a short position of La Z. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP and La Z.
Diversification Opportunities for BHP and La Z
Pay attention - limited upside
The 3 months correlation between BHP and LZB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy and BHP 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 are associated (or correlated) with La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of BHP i.e., BHP and La Z go up and down completely randomly.
Pair Corralation between BHP and La Z
If you would invest (100.00) in BHP Group on January 25, 2024 and sell it today you would earn a total of 100.00 from holding BHP Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
BHP Group vs. La Z Boy Incorporated
Performance |
Timeline |
BHP Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
La Z Boy |
BHP and La Z Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BHP and La Z
The main advantage of trading using opposite BHP and La Z positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP position performs unexpectedly, La Z 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 La Z will offset losses from the drop in La Z's long position.BHP vs. Sligro Food Group | BHP vs. Where Food Comes | BHP vs. Blue Hat Interactive | BHP vs. Marfrig Global Foods |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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