Correlation Between BlackRock and China Everbright
Can any of the company-specific risk be diversified away by investing in both BlackRock and China Everbright 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 China Everbright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and China Everbright Limited, you can compare the effects of market volatilities on BlackRock and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and China Everbright.
Diversification Opportunities for BlackRock and China Everbright
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and China Everbright Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright has no effect on the direction of BlackRock i.e., BlackRock and China Everbright go up and down completely randomly.
Pair Corralation between BlackRock and China Everbright
If you would invest 98,508 in BlackRock on September 2, 2024 and sell it today you would earn a total of 3,772 from holding BlackRock or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock vs. China Everbright Limited
Performance |
| Timeline |
| BlackRock |
| China Everbright |
BlackRock and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and China Everbright
The main advantage of trading using opposite BlackRock and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| BlackRock vs. KKR Co LP | BlackRock vs. Apollo Global Management | BlackRock vs. Brookfield Asset Management | BlackRock vs. Carlyle Group |
| China Everbright vs. KKR Co LP | China Everbright vs. Apollo Global Management | China Everbright vs. TPG Inc | China Everbright vs. Blackstone Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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