Correlation Between Black Rock and GQG Partners
Can any of the company-specific risk be diversified away by investing in both Black Rock and GQG Partners 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 GQG Partners 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 GQG Partners DRC, you can compare the effects of market volatilities on Black Rock and GQG Partners 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 GQG Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and GQG Partners.
Diversification Opportunities for Black Rock and GQG Partners
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Black and GQG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and GQG Partners DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GQG Partners DRC 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 GQG Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GQG Partners DRC has no effect on the direction of Black Rock i.e., Black Rock and GQG Partners go up and down completely randomly.
Pair Corralation between Black Rock and GQG Partners
Assuming the 90 days trading horizon Black Rock Mining is expected to generate 0.71 times more return on investment than GQG Partners. However, Black Rock Mining is 1.42 times less risky than GQG Partners. It trades about -0.08 of its potential returns per unit of risk. GQG Partners DRC is currently generating about -0.1 per unit of risk. If you would invest 5.10 in Black Rock Mining on August 29, 2024 and sell it today you would lose (0.50) from holding Black Rock Mining or give up 9.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. GQG Partners DRC
Performance |
| Timeline |
| Black Rock Mining |
| GQG Partners DRC |
Black Rock and GQG Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and GQG Partners
The main advantage of trading using opposite Black Rock and GQG Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, GQG Partners 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 GQG Partners will offset losses from the drop in GQG Partners' long position.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Sandfire Resources NL |
| GQG Partners vs. Alto Metals | GQG Partners vs. Black Rock Mining | GQG Partners vs. Sky Metals | GQG Partners 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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