AGL vs BHG | Tuesday, 22 August 2023
Updated: Aug 23
Published at 13h37
For an enlarged view, click on the arrows in the top right corner of the image
For traders employing market neutral strategies, here are a few performance and data points to note for BHP Group (BHG) relative to Anglo American Plc (AGL).
AGL vs BHG: 3-Month Performance
AGL vs BHG: 6-Month Performance
AGL vs BHG: 1-Year Performance
The price differential is at the highest since 2016 i.e. BHG at the highest level relative to AGL.
The relative/ratio chart (AGL/BHG) shows the price trading around medium term horizontal support.
At current levels, it may be worth considering a market neutral (pair) trade i.e. Buy AGL, Sell BHG
Current relative ratio: 0.9172
The above idea is a reversal of my recent idea (buy BHG, sell AGL), published 14 March 2023 which has since advanced by 23% over the 5 months vs a flat Top 40 over the same period. Also over the same 5-month period, the Satrix Resources is down by 13%, which results in the pair generating 36% alpha.
Original chart below: