Correlation Between Block and Sharing Economy
Can any of the company-specific risk be diversified away by investing in both Block and Sharing Economy 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 Block and Sharing Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Block Inc and Sharing Economy International, you can compare the effects of market volatilities on Block and Sharing Economy 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 Block with a short position of Sharing Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Block and Sharing Economy.
Diversification Opportunities for Block and Sharing Economy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Block and Sharing is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Block Inc and Sharing Economy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharing Economy Inte and Block 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 Block Inc are associated (or correlated) with Sharing Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharing Economy Inte has no effect on the direction of Block i.e., Block and Sharing Economy go up and down completely randomly.
Pair Corralation between Block and Sharing Economy
If you would invest 6,847 in Block Inc on September 2, 2024 and sell it today you would earn a total of 2,008 from holding Block Inc or generate 29.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Block Inc vs. Sharing Economy International
Performance |
| Timeline |
| Block Inc |
| Sharing Economy Inte |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Block and Sharing Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Block and Sharing Economy
The main advantage of trading using opposite Block and Sharing Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Block position performs unexpectedly, Sharing Economy 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 Sharing Economy will offset losses from the drop in Sharing Economy's long position.The idea behind Block Inc and Sharing Economy International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sharing Economy vs. Fuse Science | Sharing Economy vs. Data443 Risk Mitigation | Sharing Economy vs. Smartmetric | Sharing Economy vs. Taoping |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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