Correlation Between Black Rock and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Black Rock and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio 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 Hutchison Telecommunications, you can compare the effects of market volatilities on Black Rock and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Hutchison Telecommunicatio.
Diversification Opportunities for Black Rock and Hutchison Telecommunicatio
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Black and Hutchison is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Black Rock i.e., Black Rock and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Black Rock and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Black Rock Mining is expected to generate 0.57 times more return on investment than Hutchison Telecommunicatio. However, Black Rock Mining is 1.76 times less risky than Hutchison Telecommunicatio. It trades about -0.16 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about -0.11 per unit of risk. If you would invest 5.00 in Black Rock Mining on August 29, 2024 and sell it today you would lose (0.40) from holding Black Rock Mining or give up 8.0% 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. Hutchison Telecommunications
Performance |
| Timeline |
| Black Rock Mining |
| Hutchison Telecommunicatio |
Black Rock and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Hutchison Telecommunicatio
The main advantage of trading using opposite Black Rock and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio'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 |
| Hutchison Telecommunicatio vs. Macquarie Group | Hutchison Telecommunicatio vs. CSL | Hutchison Telecommunicatio vs. Commonwealth Bank of | Hutchison Telecommunicatio vs. Commonwealth Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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