Correlation Between Globe Metals and Black Rock
Can any of the company-specific risk be diversified away by investing in both Globe Metals and Black Rock 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 Globe Metals and Black Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Metals Mining and Black Rock Mining, you can compare the effects of market volatilities on Globe Metals and Black Rock 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 Globe Metals with a short position of Black Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Black Rock.
Diversification Opportunities for Globe Metals and Black Rock
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Globe and Black is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and Black Rock Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Rock Mining and Globe Metals 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 Globe Metals Mining are associated (or correlated) with Black Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Rock Mining has no effect on the direction of Globe Metals i.e., Globe Metals and Black Rock go up and down completely randomly.
Pair Corralation between Globe Metals and Black Rock
Assuming the 90 days trading horizon Globe Metals Mining is expected to under-perform the Black Rock. In addition to that, Globe Metals is 1.34 times more volatile than Black Rock Mining. It trades about 0.0 of its total potential returns per unit of risk. Black Rock Mining is currently generating about 0.22 per unit of volatility. If you would invest 3.20 in Black Rock Mining on October 17, 2024 and sell it today you would earn a total of 0.50 from holding Black Rock Mining or generate 15.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Metals Mining vs. Black Rock Mining
Performance |
| Timeline |
| Globe Metals Mining |
| Black Rock Mining |
Globe Metals and Black Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Black Rock
The main advantage of trading using opposite Globe Metals and Black Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals position performs unexpectedly, Black Rock 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 Black Rock will offset losses from the drop in Black Rock's long position.| Globe Metals vs. Sonic Healthcare | Globe Metals vs. Hotel Property Investments | Globe Metals vs. Pinnacle Investment Management | Globe Metals vs. Flagship Investments |
| Black Rock vs. Farm Pride Foods | Black Rock vs. Evolution Mining | Black Rock vs. Globe Metals Mining | Black Rock vs. Charter Hall Education |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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