Correlation Between Black Rock and ARN Media
Can any of the company-specific risk be diversified away by investing in both Black Rock and ARN Media 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 Rock and ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Rock Mining and ARN Media Limited, you can compare the effects of market volatilities on Black Rock and ARN Media 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 Rock with a short position of ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and ARN Media.
Diversification Opportunities for Black Rock and ARN Media
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Black and ARN is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited and Black Rock 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 Rock Mining are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Black Rock i.e., Black Rock and ARN Media go up and down completely randomly.
Pair Corralation between Black Rock and ARN Media
Assuming the 90 days trading horizon Black Rock Mining is expected to generate 1.16 times more return on investment than ARN Media. However, Black Rock is 1.16 times more volatile than ARN Media Limited. It trades about 0.15 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.12 per unit of risk. If you would invest 3.10 in Black Rock Mining on October 12, 2024 and sell it today you would earn a total of 0.30 from holding Black Rock Mining or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. ARN Media Limited
Performance |
| Timeline |
| Black Rock Mining |
| ARN Media Limited |
Black Rock and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and ARN Media
The main advantage of trading using opposite Black Rock and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Black Rock vs. Auswide Bank | Black Rock vs. Macquarie Bank Limited | Black Rock vs. Liberty Financial Group | Black Rock vs. Bank of Queensland |
| ARN Media vs. BSP Financial Group | ARN Media vs. Insignia Financial | ARN Media vs. Perpetual Credit Income | ARN Media vs. Black Rock Mining |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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