Correlation Between Black Rock and Great Northern
Can any of the company-specific risk be diversified away by investing in both Black Rock and Great Northern 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 Great Northern 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 Great Northern Minerals, you can compare the effects of market volatilities on Black Rock and Great Northern 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 Great Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and Great Northern.
Diversification Opportunities for Black Rock and Great Northern
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Great is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Great Northern Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Northern Minerals 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 Great Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Northern Minerals has no effect on the direction of Black Rock i.e., Black Rock and Great Northern go up and down completely randomly.
Pair Corralation between Black Rock and Great Northern
Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Great Northern. But the stock apears to be less risky and, when comparing its historical volatility, Black Rock Mining is 1.58 times less risky than Great Northern. The stock trades about -0.1 of its potential returns per unit of risk. The Great Northern Minerals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.20 in Great Northern Minerals on October 8, 2024 and sell it today you would earn a total of 0.10 from holding Great Northern Minerals or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Black Rock Mining vs. Great Northern Minerals
Performance |
Timeline |
Black Rock Mining |
Great Northern Minerals |
Black Rock and Great Northern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Black Rock and Great Northern
The main advantage of trading using opposite Black Rock and Great Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Rock position performs unexpectedly, Great Northern 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 Great Northern will offset losses from the drop in Great Northern's long position.Black Rock vs. Ras Technology Holdings | Black Rock vs. Bailador Technology Invest | Black Rock vs. Diversified United Investment | Black Rock vs. MFF Capital Investments |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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