Correlation Between Medibank Private and Black Rock
Can any of the company-specific risk be diversified away by investing in both Medibank Private 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 Medibank Private and Black Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medibank Private and Black Rock Mining, you can compare the effects of market volatilities on Medibank Private 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 Medibank Private with a short position of Black Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medibank Private and Black Rock.
Diversification Opportunities for Medibank Private and Black Rock
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Medibank and Black is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Medibank Private 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 Medibank Private 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 Medibank Private 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 Medibank Private i.e., Medibank Private and Black Rock go up and down completely randomly.
Pair Corralation between Medibank Private and Black Rock
Assuming the 90 days trading horizon Medibank Private is expected to generate 0.35 times more return on investment than Black Rock. However, Medibank Private is 2.85 times less risky than Black Rock. It trades about 0.27 of its potential returns per unit of risk. Black Rock Mining is currently generating about -0.11 per unit of risk. If you would invest 382.00 in Medibank Private on November 6, 2024 and sell it today you would earn a total of 18.00 from holding Medibank Private or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medibank Private vs. Black Rock Mining
Performance |
| Timeline |
| Medibank Private |
| Black Rock Mining |
Medibank Private and Black Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medibank Private and Black Rock
The main advantage of trading using opposite Medibank Private and Black Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medibank Private 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.| Medibank Private vs. Centrex Metals | Medibank Private vs. Dalaroo Metals | Medibank Private vs. 29Metals | Medibank Private vs. Aurelia Metals |
| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. De Grey Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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