Correlation Between BLK and Dogecoin

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

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

Diversification Opportunities for BLK and Dogecoin

0.18

Correlation Coefficient

BLK  Dogecoin

Average diversification

The 3 months correlation between BLK and Dogecoin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BLK and Dogecoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogecoin and BLK 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 BLK are associated (or correlated) with Dogecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogecoin has no effect on the direction of BLK i.e., BLK and Dogecoin go up and down completely randomly.

Pair Corralation between BLK and Dogecoin

Assuming the 90 days trading horizon BLK is expected to generate 0.41 times more return on investment than Dogecoin. However, BLK is 2.46 times less risky than Dogecoin. It trades about 0.03 of its potential returns per unit of risk. Dogecoin is currently generating about -0.06 per unit of risk. If you would invest  2.83  in BLK on November 19, 2024 and sell it today you would earn a total of  0.10  from holding BLK or generate 3.53% return on investment over 90 days.

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

BLK  vs.  Dogecoin

BLK

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BLK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, BLK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dogecoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dogecoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Dogecoin shareholders.

Pair Trading with BLK and Dogecoin

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

The idea behind BLK and Dogecoin 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.