Correlation Between BlackRock and Sparta AG
Can any of the company-specific risk be diversified away by investing in both BlackRock and Sparta AG 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 Sparta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and Sparta AG, you can compare the effects of market volatilities on BlackRock and Sparta AG 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 Sparta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Sparta AG.
Diversification Opportunities for BlackRock and Sparta AG
Poor diversification
The 3 months correlation between BlackRock and Sparta is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Sparta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta AG 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 Sparta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta AG has no effect on the direction of BlackRock i.e., BlackRock and Sparta AG go up and down completely randomly.
Pair Corralation between BlackRock and Sparta AG
Assuming the 90 days trading horizon BlackRock is expected to generate 0.62 times more return on investment than Sparta AG. However, BlackRock is 1.61 times less risky than Sparta AG. It trades about 0.21 of its potential returns per unit of risk. Sparta AG is currently generating about 0.12 per unit of risk. If you would invest 71,068 in BlackRock on August 24, 2024 and sell it today you would earn a total of 26,022 from holding BlackRock or generate 36.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock vs. Sparta AG
Performance |
| Timeline |
| BlackRock |
| Sparta AG |
BlackRock and Sparta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and Sparta AG
The main advantage of trading using opposite BlackRock and Sparta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, Sparta AG 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 Sparta AG will offset losses from the drop in Sparta AG's long position.| BlackRock vs. Ameriprise Financial | BlackRock vs. Ares Management Corp | BlackRock vs. Origin Agritech | BlackRock vs. SIVERS SEMICONDUCTORS AB |
| Sparta AG vs. Cleanaway Waste Management | Sparta AG vs. SBM OFFSHORE | Sparta AG vs. DATANG INTL POW | Sparta AG vs. SIEM OFFSHORE NEW |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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