Correlation Between Block and Emetals
Can any of the company-specific risk be diversified away by investing in both Block and Emetals 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 Emetals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Block Inc and Emetals, you can compare the effects of market volatilities on Block and Emetals 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 Emetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Block and Emetals.
Diversification Opportunities for Block and Emetals
Poor diversification
The 3 months correlation between Block and Emetals is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Block Inc and Emetals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emetals 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 Emetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emetals has no effect on the direction of Block i.e., Block and Emetals go up and down completely randomly.
Pair Corralation between Block and Emetals
If you would invest 13,924 in Block Inc on September 22, 2024 and sell it today you would earn a total of 98.00 from holding Block Inc or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Block Inc vs. Emetals
Performance |
| Timeline |
| Block Inc |
| Emetals |
Block and Emetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Block and Emetals
The main advantage of trading using opposite Block and Emetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Block position performs unexpectedly, Emetals 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 Emetals will offset losses from the drop in Emetals' long position.| Block vs. Minbos Resources | Block vs. Tlou Energy | Block vs. Encounter Resources | Block vs. Elevate Uranium |
| Emetals vs. Northern Star Resources | Emetals vs. Evolution Mining | Emetals vs. Bluescope Steel | Emetals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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