Correlation Between Black Rock and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Black Rock and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on Black Rock and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Westpac Banking.
Diversification Opportunities for Black Rock and Westpac Banking
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Westpac is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Black Rock i.e., Black Rock and Westpac Banking go up and down completely randomly.
Pair Corralation between Black Rock and Westpac Banking
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Westpac Banking. In addition to that, Black Rock is 11.58 times more volatile than Westpac Banking. It trades about -0.35 of its total potential returns per unit of risk. Westpac Banking is currently generating about 0.01 per unit of volatility. If you would invest 10,608 in Westpac Banking on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Westpac Banking or generate 0.11% 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. Westpac Banking
Performance |
| Timeline |
| Black Rock Mining |
| Westpac Banking |
Black Rock and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Rock and Westpac Banking
The main advantage of trading using opposite Black Rock and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Black Rock vs. Pinnacle Investment Management | Black Rock vs. Cleanaway Waste Management | Black Rock vs. Stelar Metals | Black Rock vs. Ainsworth Game Technology |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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