Correlation Between Paladin Energy and Black Rock
Can any of the company-specific risk be diversified away by investing in both Paladin Energy 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 Paladin Energy and Black Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paladin Energy and Black Rock Mining, you can compare the effects of market volatilities on Paladin Energy 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 Paladin Energy with a short position of Black Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paladin Energy and Black Rock.
Diversification Opportunities for Paladin Energy and Black Rock
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Paladin and Black is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Paladin Energy 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 Paladin Energy 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 Paladin Energy 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 Paladin Energy i.e., Paladin Energy and Black Rock go up and down completely randomly.
Pair Corralation between Paladin Energy and Black Rock
Assuming the 90 days trading horizon Paladin Energy is expected to generate 0.83 times more return on investment than Black Rock. However, Paladin Energy is 1.21 times less risky than Black Rock. It trades about 0.02 of its potential returns per unit of risk. Black Rock Mining is currently generating about -0.04 per unit of risk. If you would invest 790.00 in Paladin Energy on September 12, 2024 and sell it today you would lose (28.00) from holding Paladin Energy or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paladin Energy vs. Black Rock Mining
Performance |
| Timeline |
| Paladin Energy |
| Black Rock Mining |
Paladin Energy and Black Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paladin Energy and Black Rock
The main advantage of trading using opposite Paladin Energy and Black Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paladin Energy 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.| Paladin Energy vs. Black Rock Mining | Paladin Energy vs. BTC Health Limited | Paladin Energy vs. Regis Healthcare | Paladin Energy vs. Capitol Health |
| Black Rock vs. Northern Star Resources | Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Sandfire Resources NL |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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