Correlation Between Blackrock World and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Blackrock World and Intermediate Capital 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 World and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock World Mining and Intermediate Capital Group, you can compare the effects of market volatilities on Blackrock World and Intermediate Capital 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 World with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock World and Intermediate Capital.
Diversification Opportunities for Blackrock World and Intermediate Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blackrock and Intermediate is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock World Mining and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Blackrock World 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 World Mining are associated (or correlated) with Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Blackrock World i.e., Blackrock World and Intermediate Capital go up and down completely randomly.
Pair Corralation between Blackrock World and Intermediate Capital
Assuming the 90 days trading horizon Blackrock World Mining is expected to under-perform the Intermediate Capital. But the stock apears to be less risky and, when comparing its historical volatility, Blackrock World Mining is 1.2 times less risky than Intermediate Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Intermediate Capital Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 123,285 in Intermediate Capital Group on September 21, 2024 and sell it today you would earn a total of 81,715 from holding Intermediate Capital Group or generate 66.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock World Mining vs. Intermediate Capital Group
Performance |
| Timeline |
| Blackrock World Mining |
| Intermediate Capital |
Blackrock World and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock World and Intermediate Capital
The main advantage of trading using opposite Blackrock World and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock World position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.| Blackrock World vs. Catalyst Media Group | Blackrock World vs. CATLIN GROUP | Blackrock World vs. Tamburi Investment Partners | Blackrock World vs. Magnora ASA |
| Intermediate Capital vs. Catalyst Media Group | Intermediate Capital vs. CATLIN GROUP | Intermediate Capital vs. Tamburi Investment Partners | Intermediate Capital vs. Magnora ASA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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