Correlation Between Iluka Resources and Block
Can any of the company-specific risk be diversified away by investing in both Iluka Resources and Block 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 Iluka Resources and Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iluka Resources and Block Inc, you can compare the effects of market volatilities on Iluka Resources and Block 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 Iluka Resources with a short position of Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iluka Resources and Block.
Diversification Opportunities for Iluka Resources and Block
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iluka and Block is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Iluka Resources and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc and Iluka Resources 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 Iluka Resources are associated (or correlated) with Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of Iluka Resources i.e., Iluka Resources and Block go up and down completely randomly.
Pair Corralation between Iluka Resources and Block
Assuming the 90 days trading horizon Iluka Resources is expected to under-perform the Block. But the stock apears to be less risky and, when comparing its historical volatility, Iluka Resources is 1.53 times less risky than Block. The stock trades about -0.09 of its potential returns per unit of risk. The Block Inc is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 11,168 in Block Inc on September 1, 2024 and sell it today you would earn a total of 2,663 from holding Block Inc or generate 23.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Iluka Resources vs. Block Inc
Performance |
| Timeline |
| Iluka Resources |
| Block Inc |
Iluka Resources and Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iluka Resources and Block
The main advantage of trading using opposite Iluka Resources and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iluka Resources position performs unexpectedly, Block 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 Block will offset losses from the drop in Block's long position.| Iluka Resources vs. Black Rock Mining | Iluka Resources vs. Retail Food Group | Iluka Resources vs. Andean Silver Limited | Iluka Resources vs. Super Retail Group |
| Block vs. Aneka Tambang Tbk | Block vs. Unibail Rodamco Westfield SE | Block vs. Macquarie Group | Block vs. Commonwealth Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |