Correlation Between Black Rock and Macquarie
Can any of the company-specific risk be diversified away by investing in both Black Rock and Macquarie 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 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 Group, you can compare the effects of market volatilities on Black Rock and Macquarie 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Macquarie.
Diversification Opportunities for Black Rock and Macquarie
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Black and Macquarie is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Black Rock i.e., Black Rock and Macquarie go up and down completely randomly.
Pair Corralation between Black Rock and Macquarie
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Macquarie. In addition to that, Black Rock is 6.67 times more volatile than Macquarie Group. It trades about -0.32 of its total potential returns per unit of risk. Macquarie Group is currently generating about -0.05 per unit of volatility. If you would invest 22,882 in Macquarie Group on September 12, 2024 and sell it today you would lose (197.00) from holding Macquarie Group or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Rock Mining vs. Macquarie Group
Performance |
| Timeline |
| Black Rock Mining |
| Macquarie Group |
Black Rock and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Macquarie
The main advantage of trading using opposite Black Rock and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Macquarie 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 will offset losses from the drop in Macquarie'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 |
| Macquarie vs. Austco Healthcare | Macquarie vs. Bell Financial Group | Macquarie vs. Oneview Healthcare PLC | Macquarie vs. Bank of Queensland |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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