Correlation Between BLOK Technologies and Southern Trust

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

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

Diversification Opportunities for BLOK Technologies and Southern Trust

0.0

Correlation Coefficient

BLOK Technologies  Southern Trust

Pay attention - limited upside

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

Pair Corralation between BLOK Technologies and Southern Trust

Assuming the 90 days horizon BLOK Technologies is expected to generate 10.09 times more return on investment than Southern Trust. However, BLOK Technologies is 10.09 times more volatile than Southern Trust Securities. It trades about 0.06 of its potential returns per unit of risk. Southern Trust Securities is currently generating about -0.06 per unit of risk. If you would invest  0.00  in BLOK Technologies on October 10, 2024 and sell it today you would earn a total of  0.00  from holding BLOK Technologies or generate 0.0% return on investment over 90 days.

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

BLOK Technologies  vs.  Southern Trust Securities

BLOK Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLOK Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, BLOK Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Southern Trust Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern Trust Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Southern Trust is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BLOK Technologies and Southern Trust

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

The idea behind BLOK Technologies and Southern Trust Securities 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 Transaction History module to view history of all your transactions and understand their impact on performance.