Correlation Between Black Rock and MFF Capital
Can any of the company-specific risk be diversified away by investing in both Black Rock and MFF Capital 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 MFF Capital 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 MFF Capital Investments, you can compare the effects of market volatilities on Black Rock and MFF Capital 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 MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and MFF Capital.
Diversification Opportunities for Black Rock and MFF Capital
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Black and MFF is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments 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 MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Black Rock i.e., Black Rock and MFF Capital go up and down completely randomly.
Pair Corralation between Black Rock and MFF Capital
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the MFF Capital. In addition to that, Black Rock is 3.6 times more volatile than MFF Capital Investments. It trades about -0.06 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.15 per unit of volatility. If you would invest 291.00 in MFF Capital Investments on September 3, 2024 and sell it today you would earn a total of 144.00 from holding MFF Capital Investments or generate 49.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. MFF Capital Investments
Performance |
| Timeline |
| Black Rock Mining |
| MFF Capital Investments |
Black Rock and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and MFF Capital
The main advantage of trading using opposite Black Rock and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, MFF Capital 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Aneka Tambang Tbk |
| MFF Capital vs. Mirrabooka Investments | MFF Capital vs. Carlton Investments | MFF Capital vs. Australian United Investment | MFF Capital vs. Platinum Asia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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