Correlation Between BLZ and ANKR
Can any of the company-specific risk be diversified away by investing in both BLZ and ANKR 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 BLZ and ANKR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLZ and ANKR, you can compare the effects of market volatilities on BLZ and ANKR 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 BLZ with a short position of ANKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLZ and ANKR.
Diversification Opportunities for BLZ and ANKR
Weak diversification
The 3 months correlation between BLZ and ANKR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and ANKR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANKR and BLZ 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 BLZ are associated (or correlated) with ANKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANKR has no effect on the direction of BLZ i.e., BLZ and ANKR go up and down completely randomly.
Pair Corralation between BLZ and ANKR
Assuming the 90 days trading horizon BLZ is expected to generate 1.02 times less return on investment than ANKR. But when comparing it to its historical volatility, BLZ is 1.04 times less risky than ANKR. It trades about 0.05 of its potential returns per unit of risk. ANKR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.17 in ANKR on August 24, 2024 and sell it today you would earn a total of 1.28 from holding ANKR or generate 58.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.5% |
| Values | Daily Returns |
BLZ vs. ANKR
Performance |
| Timeline |
| BLZ |
| ANKR |
BLZ and ANKR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLZ and ANKR
The main advantage of trading using opposite BLZ and ANKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLZ position performs unexpectedly, ANKR 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 ANKR will offset losses from the drop in ANKR's long position.The idea behind BLZ and ANKR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |