Correlation Between Black Rock and Global Health
Can any of the company-specific risk be diversified away by investing in both Black Rock and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Black Rock and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Global Health.
Diversification Opportunities for Black Rock and Global Health
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Black Rock i.e., Black Rock and Global Health go up and down completely randomly.
Pair Corralation between Black Rock and Global Health
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Global Health. In addition to that, Black Rock is 1.48 times more volatile than Global Health. It trades about -0.24 of its total potential returns per unit of risk. Global Health is currently generating about 0.02 per unit of volatility. If you would invest 14.00 in Global Health on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% 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. Global Health
Performance |
| Timeline |
| Black Rock Mining |
| Global Health |
Black Rock and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Global Health
The main advantage of trading using opposite Black Rock and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Sandfire Resources NL |
| Global Health vs. Alto Metals | Global Health vs. Ras Technology Holdings | Global Health vs. Ainsworth Game Technology | Global Health vs. Aurelia Metals |
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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