Correlation Between Bisichi Mining and United Utilities

Can any of the company-specific risk be diversified away by investing in both Bisichi Mining and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on Bisichi Mining and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisichi Mining and United Utilities.

Diversification Opportunities for Bisichi Mining and United Utilities

-0.04

Correlation Coefficient

Bisichi Mining  United Utilities

Good diversification

The 3 months correlation between Bisichi and United is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bisichi Mining PLC and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Bisichi Mining i.e., Bisichi Mining and United Utilities go up and down completely randomly.

Pair Corralation between Bisichi Mining and United Utilities

Assuming the 90 days trading horizon Bisichi Mining PLC is expected to generate 2.14 times more return on investment than United Utilities. However, Bisichi Mining is 2.14 times more volatile than United Utilities Group. It trades about 0.03 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.01 per unit of risk. If you would invest  9,518  in Bisichi Mining PLC on October 18, 2024 and sell it today you would earn a total of  982.00  from holding Bisichi Mining PLC or generate 10.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

Bisichi Mining PLC  vs.  United Utilities Group

Bisichi Mining PLC

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

United Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Utilities Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic 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 United Utilities

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

The idea behind Bisichi Mining PLC and United Utilities Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.