Correlation Between BHP Group and MFS Active
Can any of the company-specific risk be diversified away by investing in both BHP Group and MFS Active 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 Group and MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group Limited and MFS Active Value, you can compare the effects of market volatilities on BHP Group and MFS Active 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 Group with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and MFS Active.
Diversification Opportunities for BHP Group and MFS Active
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BHP and MFS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and MFS Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Value and BHP Group 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 Limited are associated (or correlated) with MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active Value has no effect on the direction of BHP Group i.e., BHP Group and MFS Active go up and down completely randomly.
Pair Corralation between BHP Group and MFS Active
Considering the 90-day investment horizon BHP Group Limited is expected to generate 2.96 times more return on investment than MFS Active. However, BHP Group is 2.96 times more volatile than MFS Active Value. It trades about 0.12 of its potential returns per unit of risk. MFS Active Value is currently generating about 0.14 per unit of risk. If you would invest 4,943 in BHP Group Limited on May 31, 2025 and sell it today you would earn a total of 637.00 from holding BHP Group Limited or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHP Group Limited vs. MFS Active Value
Performance |
| Timeline |
| BHP Group Limited |
| MFS Active Value |
BHP Group and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and MFS Active
The main advantage of trading using opposite BHP Group and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, MFS Active 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 MFS Active will offset losses from the drop in MFS Active's long position.| BHP Group vs. Vale SA ADR | BHP Group vs. Teck Resources Ltd | BHP Group vs. Lithium Americas Corp | BHP Group vs. MP Materials Corp |
| MFS Active vs. FT Vest Equity | MFS Active vs. Northern Lights | MFS Active vs. Dimensional International High | MFS Active vs. JPMorgan Fundamental Data |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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