Correlation Between Black Rock and Wam Capital

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

Diversification Opportunities for Black Rock and Wam Capital

-0.54

Correlation Coefficient

Black Rock  Wam Capital

Excellent diversification

The 3 months correlation between Black and Wam is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Wam Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wam Capital 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 Wam Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wam Capital has no effect on the direction of Black Rock i.e., Black Rock and Wam Capital go up and down completely randomly.

Pair Corralation between Black Rock and Wam Capital

Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Wam Capital. In addition to that, Black Rock is 5.63 times more volatile than Wam Capital. It trades about -0.11 of its total potential returns per unit of risk. Wam Capital is currently generating about 0.09 per unit of volatility. If you would invest  157.00  in Wam Capital on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Wam Capital or generate 4.46% 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.  Wam Capital

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.

Wam Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wam Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Wam 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 Wam Capital

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

The idea behind Black Rock Mining and Wam 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..