Correlation Between BHP and Redflow

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

By analyzing existing cross correlation between BHP Group and Redflow, you can compare the effects of market volatilities on BHP and Redflow 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 Redflow. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP and Redflow.

Diversification Opportunities for BHP and Redflow

0.0

Correlation Coefficient

BHP  Redflow

Pay attention - limited upside

The 3 months correlation between BHP and Redflow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group and Redflow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redflow 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 Redflow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redflow has no effect on the direction of BHP i.e., BHP and Redflow go up and down completely randomly.

Pair Corralation between BHP and Redflow

If you would invest  3,806  in BHP Group on April 24, 2025 and sell it today you would earn a total of  345.00  from holding BHP Group or generate 9.06% return on investment over 90 days.

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

BHP Group  vs.  Redflow

BHP Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BHP Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BHP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Redflow

Risk-Adjusted Performance

Very Weak

Over the last 90 days Redflow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Redflow is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BHP and Redflow

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

The idea behind BHP Group and Redflow 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 Managers module to screen money managers from public funds and ETFs managed around the world.