Correlation Between Black Rock and MFF Capital

Can any of the company-specific risk be diversified away by investing in both Black Rock and MFF Capital 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 MFF Capital 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 MFF Capital Investments, you can compare the effects of market volatilities on Black Rock and MFF Capital 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 MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and MFF Capital.

Diversification Opportunities for Black Rock and MFF Capital

-0.4

Correlation Coefficient

Black Rock  MFF Capital

Very good diversification

The 3 months correlation between Black and MFF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments 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 MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Black Rock i.e., Black Rock and MFF Capital go up and down completely randomly.

Pair Corralation between Black Rock and MFF Capital

Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the MFF Capital. In addition to that, Black Rock is 3.22 times more volatile than MFF Capital Investments. It trades about -0.12 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about -0.03 per unit of volatility. If you would invest  435.00  in MFF Capital Investments on December 2, 2024 and sell it today you would lose (11.00) from holding MFF Capital Investments or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Black Rock Mining  vs.  MFF Capital Investments

Black Rock Mining

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MFF Capital Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFF Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, MFF Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Black Rock and MFF Capital

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

The idea behind Black Rock Mining and MFF Capital Investments 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.