Correlation Between BlackRock Frontiers and Eclectic Bar
Can any of the company-specific risk be diversified away by investing in both BlackRock Frontiers and Eclectic Bar 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 Frontiers and Eclectic Bar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Frontiers Investment and Eclectic Bar Group, you can compare the effects of market volatilities on BlackRock Frontiers and Eclectic Bar 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 Frontiers with a short position of Eclectic Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Frontiers and Eclectic Bar.
Diversification Opportunities for BlackRock Frontiers and Eclectic Bar
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and Eclectic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment and Eclectic Bar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclectic Bar Group and BlackRock Frontiers 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 Frontiers Investment are associated (or correlated) with Eclectic Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclectic Bar Group has no effect on the direction of BlackRock Frontiers i.e., BlackRock Frontiers and Eclectic Bar go up and down completely randomly.
Pair Corralation between BlackRock Frontiers and Eclectic Bar
Assuming the 90 days trading horizon BlackRock Frontiers is expected to generate 5.89 times less return on investment than Eclectic Bar. But when comparing it to its historical volatility, BlackRock Frontiers Investment is 4.26 times less risky than Eclectic Bar. It trades about 0.02 of its potential returns per unit of risk. Eclectic Bar Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Eclectic Bar Group on November 7, 2024 and sell it today you would earn a total of 1,310 from holding Eclectic Bar Group or generate 38.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
BlackRock Frontiers Investment vs. Eclectic Bar Group
Performance |
| Timeline |
| BlackRock Frontiers |
| Eclectic Bar Group |
BlackRock Frontiers and Eclectic Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Frontiers and Eclectic Bar
The main advantage of trading using opposite BlackRock Frontiers and Eclectic Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Frontiers position performs unexpectedly, Eclectic Bar 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 Eclectic Bar will offset losses from the drop in Eclectic Bar's long position.| BlackRock Frontiers vs. Symphony Environmental Technologies | BlackRock Frontiers vs. Europa Metals | BlackRock Frontiers vs. United Airlines Holdings | BlackRock Frontiers vs. Sovereign Metals |
| Eclectic Bar vs. Bank of Ireland | Eclectic Bar vs. Nordea Bank Abp | Eclectic Bar vs. St Galler Kantonalbank | Eclectic Bar vs. Tatton Asset Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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