Correlation Between Black Rock and Bellevue Gold
Can any of the company-specific risk be diversified away by investing in both Black Rock and Bellevue Gold 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 Bellevue Gold 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 Bellevue Gold, you can compare the effects of market volatilities on Black Rock and Bellevue Gold 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 Bellevue Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Bellevue Gold.
Diversification Opportunities for Black Rock and Bellevue Gold
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Bellevue is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Bellevue Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Gold 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 Bellevue Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Gold has no effect on the direction of Black Rock i.e., Black Rock and Bellevue Gold go up and down completely randomly.
Pair Corralation between Black Rock and Bellevue Gold
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Bellevue Gold. But the stock apears to be less risky and, when comparing its historical volatility, Black Rock Mining is 1.14 times less risky than Bellevue Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Bellevue Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Bellevue Gold on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Bellevue Gold or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. Bellevue Gold
Performance |
| Timeline |
| Black Rock Mining |
| Bellevue Gold |
Black Rock and Bellevue Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Bellevue Gold
The main advantage of trading using opposite Black Rock and Bellevue Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Bellevue Gold 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 Bellevue Gold will offset losses from the drop in Bellevue Gold's long position.| Black Rock vs. Dug Technology | Black Rock vs. Hutchison Telecommunications | Black Rock vs. Embark Education Group | Black Rock vs. Spirit Telecom |
| Bellevue Gold vs. Northern Star Resources | Bellevue Gold vs. Evolution Mining | Bellevue Gold vs. Bluescope Steel | Bellevue Gold vs. De Grey 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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