Correlation Between Black Rock and Australia

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

By analyzing existing cross correlation between Black Rock Mining and Australia and New, you can compare the effects of market volatilities on Black Rock and Australia 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 Black Rock with a short position of Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Australia.

Diversification Opportunities for Black Rock and Australia

0.14

Correlation Coefficient

Black Rock  Australia

Average diversification

The 3 months correlation between Black and Australia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New and Black Rock 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 Black Rock Mining are associated (or correlated) with Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Black Rock i.e., Black Rock and Australia go up and down completely randomly.

Pair Corralation between Black Rock and Australia

Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Australia. In addition to that, Black Rock is 4.88 times more volatile than Australia and New. It trades about -0.2 of its total potential returns per unit of risk. Australia and New is currently generating about -0.52 per unit of volatility. If you would invest  3,226  in Australia and New on September 23, 2024 and sell it today you would lose (432.00) from holding Australia and New or give up 13.39% of portfolio value over 90 days.

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

Black Rock Mining  vs.  Australia and New

Black Rock Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Rock Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Australia and New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Australia and New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Black Rock and Australia

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

The idea behind Black Rock Mining and Australia and New 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.