Correlation Between BlackRock and Bayerische Motoren
Can any of the company-specific risk be diversified away by investing in both BlackRock and Bayerische Motoren 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 BlackRock and Bayerische Motoren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and Bayerische Motoren Werke, you can compare the effects of market volatilities on BlackRock and Bayerische Motoren 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 BlackRock with a short position of Bayerische Motoren. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Bayerische Motoren.
Diversification Opportunities for BlackRock and Bayerische Motoren
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BlackRock and Bayerische is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Bayerische Motoren Werke in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayerische Motoren Werke and BlackRock 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 BlackRock are associated (or correlated) with Bayerische Motoren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayerische Motoren Werke has no effect on the direction of BlackRock i.e., BlackRock and Bayerische Motoren go up and down completely randomly.
Pair Corralation between BlackRock and Bayerische Motoren
Assuming the 90 days trading horizon BlackRock is expected to generate 1.09 times more return on investment than Bayerische Motoren. However, BlackRock is 1.09 times more volatile than Bayerische Motoren Werke. It trades about 0.16 of its potential returns per unit of risk. Bayerische Motoren Werke is currently generating about -0.01 per unit of risk. If you would invest 1,189,074 in BlackRock on September 14, 2024 and sell it today you would earn a total of 933,126 from holding BlackRock or generate 78.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
BlackRock vs. Bayerische Motoren Werke
Performance |
| Timeline |
| BlackRock |
| Bayerische Motoren Werke |
BlackRock and Bayerische Motoren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and Bayerische Motoren
The main advantage of trading using opposite BlackRock and Bayerische Motoren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, Bayerische Motoren 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 Bayerische Motoren will offset losses from the drop in Bayerische Motoren's long position.| BlackRock vs. Ameriprise Financial | BlackRock vs. State Street | BlackRock vs. The Select Sector | BlackRock vs. Promotora y Operadora |
| Bayerische Motoren vs. Verizon Communications | Bayerische Motoren vs. United Airlines Holdings | Bayerische Motoren vs. First Republic Bank | Bayerische Motoren vs. McEwen Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |