Correlation Between Bisichi Mining and Compass Group

Can any of the company-specific risk be diversified away by investing in both Bisichi Mining and Compass 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 Bisichi Mining and Compass Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bisichi Mining PLC and Compass Group PLC, you can compare the effects of market volatilities on Bisichi Mining and Compass 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 Bisichi Mining with a short position of Compass Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisichi Mining and Compass Group.

Diversification Opportunities for Bisichi Mining and Compass Group

0.43

Correlation Coefficient

Bisichi Mining  Compass Group

Very weak diversification

The 3 months correlation between Bisichi and Compass is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bisichi Mining PLC and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC and Bisichi Mining 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 Bisichi Mining PLC are associated (or correlated) with Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of Bisichi Mining i.e., Bisichi Mining and Compass Group go up and down completely randomly.

Pair Corralation between Bisichi Mining and Compass Group

Assuming the 90 days trading horizon Bisichi Mining PLC is expected to under-perform the Compass Group. In addition to that, Bisichi Mining is 1.25 times more volatile than Compass Group PLC. It trades about -0.19 of its total potential returns per unit of risk. Compass Group PLC is currently generating about -0.09 per unit of volatility. If you would invest  264,500  in Compass Group PLC on December 24, 2024 and sell it today you would lose (20,900) from holding Compass Group PLC or give up 7.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Bisichi Mining PLC  vs.  Compass Group PLC

Bisichi Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bisichi Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Compass Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compass Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bisichi Mining and Compass Group

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

The idea behind Bisichi Mining PLC and Compass Group PLC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.