Correlation Between Black Rock and COG Financial
Can any of the company-specific risk be diversified away by investing in both Black Rock and COG Financial 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 COG Financial 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 COG Financial Services, you can compare the effects of market volatilities on Black Rock and COG Financial 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 COG Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and COG Financial.
Diversification Opportunities for Black Rock and COG Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and COG is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and COG Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COG Financial Services 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 COG Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COG Financial Services has no effect on the direction of Black Rock i.e., Black Rock and COG Financial go up and down completely randomly.
Pair Corralation between Black Rock and COG Financial
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the COG Financial. In addition to that, Black Rock is 2.2 times more volatile than COG Financial Services. It trades about -0.04 of its total potential returns per unit of risk. COG Financial Services is currently generating about 0.0 per unit of volatility. If you would invest 117.00 in COG Financial Services on October 5, 2024 and sell it today you would lose (17.00) from holding COG Financial Services or give up 14.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Black Rock Mining vs. COG Financial Services
Performance |
Timeline |
Black Rock Mining |
COG Financial Services |
Black Rock and COG Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Black Rock and COG Financial
The main advantage of trading using opposite Black Rock and COG Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, COG Financial 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 COG Financial will offset losses from the drop in COG Financial's long position.Black Rock vs. Evolution Mining | Black Rock vs. Bluescope Steel | Black Rock vs. Aneka Tambang Tbk | Black Rock vs. De Grey Mining |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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