Correlation Between BLK and NLG

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

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

Diversification Opportunities for BLK and NLG

0.0

Correlation Coefficient

BLK  NLG

Pay attention - limited upside

The 3 months correlation between BLK and NLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BLK and NLG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLG 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 NLG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLG has no effect on the direction of BLK i.e., BLK and NLG go up and down completely randomly.

Pair Corralation between BLK and NLG

If you would invest (100.00) in NLG on December 28, 2024 and sell it today you would earn a total of  100.00  from holding NLG or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BLK  vs.  NLG

BLK

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLK has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

NLG

Risk-Adjusted Performance

Very Weak

Over the last 90 days NLG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, NLG is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BLK and NLG

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

The idea behind BLK and NLG 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.