Correlation Between BlackRock and Guerrilla

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

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

Diversification Opportunities for BlackRock and Guerrilla

-0.46

Correlation Coefficient

BlackRock  Guerrilla

Very good diversification

The 3 months correlation between BlackRock and Guerrilla is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Guerrilla RF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerrilla RF and BlackRock 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 BlackRock are associated (or correlated) with Guerrilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerrilla RF has no effect on the direction of BlackRock i.e., BlackRock and Guerrilla go up and down completely randomly.

Pair Corralation between BlackRock and Guerrilla

Considering the 90-day investment horizon BlackRock is expected to generate 0.11 times more return on investment than Guerrilla. However, BlackRock is 9.15 times less risky than Guerrilla. It trades about 0.11 of its potential returns per unit of risk. Guerrilla RF is currently generating about -0.02 per unit of risk. If you would invest  94,451  in BlackRock on October 4, 2024 and sell it today you would earn a total of  7,289  from holding BlackRock or generate 7.72% return on investment over 90 days.

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

BlackRock  vs.  Guerrilla RF

BlackRock

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with BlackRock and Guerrilla

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

The idea behind BlackRock and Guerrilla RF 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 Stocks Directory module to find actively traded stocks across global markets.