Correlation Between Black Rock and EQ Resources
Can any of the company-specific risk be diversified away by investing in both Black Rock and EQ Resources 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 EQ Resources 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 EQ Resources, you can compare the effects of market volatilities on Black Rock and EQ Resources 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 EQ Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and EQ Resources.
Diversification Opportunities for Black Rock and EQ Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and EQR is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and EQ Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQ Resources 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 EQ Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQ Resources has no effect on the direction of Black Rock i.e., Black Rock and EQ Resources go up and down completely randomly.
Pair Corralation between Black Rock and EQ Resources
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the EQ Resources. In addition to that, Black Rock is 1.18 times more volatile than EQ Resources. It trades about -0.03 of its total potential returns per unit of risk. EQ Resources is currently generating about 0.03 per unit of volatility. If you would invest 4.80 in EQ Resources on September 3, 2024 and sell it today you would earn a total of 0.70 from holding EQ Resources or generate 14.58% 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. EQ Resources
Performance |
| Timeline |
| Black Rock Mining |
| EQ Resources |
Black Rock and EQ Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and EQ Resources
The main advantage of trading using opposite Black Rock and EQ Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, EQ Resources 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 EQ Resources will offset losses from the drop in EQ Resources' long position.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Aneka Tambang Tbk |
| EQ Resources vs. Charter Hall Retail | EQ Resources vs. Navigator Global Investments | EQ Resources vs. Regal Investment | EQ Resources vs. Hotel Property Investments |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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