Correlation Between Benjamin Hill and St Barbara

Can any of the company-specific risk be diversified away by investing in both Benjamin Hill and St Barbara 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 Benjamin Hill and St Barbara into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Benjamin Hill Mining and St Barbara Limited, you can compare the effects of market volatilities on Benjamin Hill and St Barbara 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 Benjamin Hill with a short position of St Barbara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benjamin Hill and St Barbara.

Diversification Opportunities for Benjamin Hill and St Barbara

0.11

Correlation Coefficient

Benjamin Hill  St Barbara

Average diversification

The 3 months correlation between Benjamin and STBMF is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Benjamin Hill Mining and St Barbara Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Barbara Limited and Benjamin Hill 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 Benjamin Hill Mining are associated (or correlated) with St Barbara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Barbara Limited has no effect on the direction of Benjamin Hill i.e., Benjamin Hill and St Barbara go up and down completely randomly.

Pair Corralation between Benjamin Hill and St Barbara

Assuming the 90 days horizon Benjamin Hill Mining is expected to generate 1.08 times more return on investment than St Barbara. However, Benjamin Hill is 1.08 times more volatile than St Barbara Limited. It trades about 0.06 of its potential returns per unit of risk. St Barbara Limited is currently generating about 0.0 per unit of risk. If you would invest  19.00  in Benjamin Hill Mining on January 19, 2024 and sell it today you would earn a total of  20.00  from holding Benjamin Hill Mining or generate 105.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Benjamin Hill Mining  vs.  St Barbara Limited

Benjamin Hill Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Benjamin Hill Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Benjamin Hill may actually be approaching a critical reversion point that can send shares even higher in May 2024.

St Barbara Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in St Barbara Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, St Barbara reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Benjamin Hill and St Barbara

The main advantage of trading using opposite Benjamin Hill and St Barbara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benjamin Hill position performs unexpectedly, St Barbara 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 St Barbara will offset losses from the drop in St Barbara's long position.

The idea behind Benjamin Hill Mining and St Barbara 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.