Correlation Between BlackRock and Lonza
Can any of the company-specific risk be diversified away by investing in both BlackRock and Lonza 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 Lonza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and Lonza Group, you can compare the effects of market volatilities on BlackRock and Lonza 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 Lonza. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Lonza.
Diversification Opportunities for BlackRock and Lonza
Excellent diversification
The 3 months correlation between BlackRock and Lonza is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group 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 Lonza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of BlackRock i.e., BlackRock and Lonza go up and down completely randomly.
Pair Corralation between BlackRock and Lonza
Considering the 90-day investment horizon BlackRock is expected to generate 0.35 times more return on investment than Lonza. However, BlackRock is 2.84 times less risky than Lonza. It trades about 0.2 of its potential returns per unit of risk. Lonza Group is currently generating about 0.02 per unit of risk. If you would invest 98,103 in BlackRock on September 1, 2024 and sell it today you would earn a total of 4,177 from holding BlackRock or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BlackRock vs. Lonza Group
Performance |
| Timeline |
| BlackRock |
| Lonza Group |
BlackRock and Lonza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and Lonza
The main advantage of trading using opposite BlackRock and Lonza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, Lonza 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 Lonza will offset losses from the drop in Lonza's long position.| BlackRock vs. KKR Co LP | BlackRock vs. Apollo Global Management | BlackRock vs. Brookfield Asset Management | BlackRock vs. Carlyle Group |
| Lonza vs. China New Energy | Lonza vs. Sonic Healthcare Ltd | Lonza vs. Charles River Laboratories | Lonza vs. Qiagen NV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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