Correlation Between Black Iron and Aftermath Silver
Can any of the company-specific risk be diversified away by investing in both Black Iron and Aftermath Silver 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 Black Iron and Aftermath Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Iron and Aftermath Silver, you can compare the effects of market volatilities on Black Iron and Aftermath Silver 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 Black Iron with a short position of Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Iron and Aftermath Silver.
Diversification Opportunities for Black Iron and Aftermath Silver
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Black and Aftermath is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Black Iron and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and Black Iron 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 Black Iron are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Black Iron i.e., Black Iron and Aftermath Silver go up and down completely randomly.
Pair Corralation between Black Iron and Aftermath Silver
Assuming the 90 days horizon Black Iron is expected to generate 4.38 times more return on investment than Aftermath Silver. However, Black Iron is 4.38 times more volatile than Aftermath Silver. It trades about 0.17 of its potential returns per unit of risk. Aftermath Silver is currently generating about -0.07 per unit of risk. If you would invest 3.60 in Black Iron on September 1, 2024 and sell it today you would earn a total of 2.20 from holding Black Iron or generate 61.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Iron vs. Aftermath Silver
Performance |
| Timeline |
| Black Iron |
| Aftermath Silver |
Black Iron and Aftermath Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Iron and Aftermath Silver
The main advantage of trading using opposite Black Iron and Aftermath Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Iron position performs unexpectedly, Aftermath Silver 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 Aftermath Silver will offset losses from the drop in Aftermath Silver's long position.| Black Iron vs. South32 Limited | Black Iron vs. NioCorp Developments Ltd | Black Iron vs. HUMANA INC | Black Iron vs. SCOR PK |
| Aftermath Silver vs. ATT Inc | Aftermath Silver vs. Merck Company | Aftermath Silver vs. Walt Disney | Aftermath Silver vs. Caterpillar |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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