Correlation Between Black Rock and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Black Rock and Macquarie Bank 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 Macquarie Bank 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 Macquarie Bank Limited, you can compare the effects of market volatilities on Black Rock and Macquarie Bank 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 Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Macquarie Bank.
Diversification Opportunities for Black Rock and Macquarie Bank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Black and Macquarie is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank 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 Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of Black Rock i.e., Black Rock and Macquarie Bank go up and down completely randomly.
Pair Corralation between Black Rock and Macquarie Bank
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Macquarie Bank. In addition to that, Black Rock is 10.12 times more volatile than Macquarie Bank Limited. It trades about -0.19 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of volatility. If you would invest 10,241 in Macquarie Bank Limited on September 25, 2024 and sell it today you would earn a total of 109.00 from holding Macquarie Bank Limited or generate 1.06% 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. Macquarie Bank Limited
Performance |
| Timeline |
| Black Rock Mining |
| Macquarie Bank |
Black Rock and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Macquarie Bank
The main advantage of trading using opposite Black Rock and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Macquarie Bank 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 Macquarie Bank will offset losses from the drop in Macquarie Bank's long position.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Aneka Tambang Tbk |
| Macquarie Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ssr Mining | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Black Cat Syndicate |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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