Correlation Between Black Rock and Autosports
Can any of the company-specific risk be diversified away by investing in both Black Rock and Autosports 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 Autosports 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 Autosports Group, you can compare the effects of market volatilities on Black Rock and Autosports 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 Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Autosports.
Diversification Opportunities for Black Rock and Autosports
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Black and Autosports is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Black Rock i.e., Black Rock and Autosports go up and down completely randomly.
Pair Corralation between Black Rock and Autosports
Assuming the 90 days trading horizon Black Rock Mining is expected to generate 2.24 times more return on investment than Autosports. However, Black Rock is 2.24 times more volatile than Autosports Group. It trades about -0.05 of its potential returns per unit of risk. Autosports Group is currently generating about -0.19 per unit of risk. If you would invest 3.40 in Black Rock Mining on November 7, 2024 and sell it today you would lose (0.10) from holding Black Rock Mining or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. Autosports Group
Performance |
| Timeline |
| Black Rock Mining |
| Autosports Group |
Black Rock and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Autosports
The main advantage of trading using opposite Black Rock and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Black Rock vs. Thorney Technologies | Black Rock vs. Readytech Holdings | Black Rock vs. Pinnacle Investment Management | Black Rock vs. MFF Capital Investments |
| Autosports vs. 29Metals | Autosports vs. Stelar Metals | Autosports vs. Advanced Braking Technology | Autosports vs. Perseus 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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