Correlation Between BlackRock Energy and Blue Owl

Can any of the company-specific risk be diversified away by investing in both BlackRock Energy and Blue Owl 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 BlackRock Energy and Blue Owl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Energy and and Blue Owl Capital, you can compare the effects of market volatilities on BlackRock Energy and Blue Owl 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 BlackRock Energy with a short position of Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Energy and Blue Owl.

Diversification Opportunities for BlackRock Energy and Blue Owl

0.8

Correlation Coefficient

BlackRock Energy  Blue Owl

Very poor diversification

The 3 months correlation between BlackRock and Blue is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Energy and and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital and BlackRock 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 BlackRock Energy and are associated (or correlated) with Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of BlackRock Energy i.e., BlackRock Energy and Blue Owl go up and down completely randomly.

Pair Corralation between BlackRock Energy and Blue Owl

Considering the 90-day investment horizon BlackRock Energy is expected to generate 4.75 times less return on investment than Blue Owl. But when comparing it to its historical volatility, BlackRock Energy and is 2.25 times less risky than Blue Owl. It trades about 0.12 of its potential returns per unit of risk. Blue Owl Capital is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,637  in Blue Owl Capital on September 5, 2024 and sell it today you would earn a total of  663.00  from holding Blue Owl Capital or generate 40.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

BlackRock Energy and  vs.  Blue Owl Capital

BlackRock Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical and fundamental indicators, BlackRock Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blue Owl Capital

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Owl Capital are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Blue Owl disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Energy and Blue Owl

The main advantage of trading using opposite BlackRock Energy and Blue Owl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Energy position performs unexpectedly, Blue Owl 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 Blue Owl will offset losses from the drop in Blue Owl's long position.

The idea behind BlackRock Energy and and Blue Owl Capital 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.