Correlation Between Blackhawk Growth and Western Asset

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

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

Diversification Opportunities for Blackhawk Growth and Western Asset

0.86

Correlation Coefficient

Blackhawk Growth  Western Asset

Very poor diversification

The 3 months correlation between Blackhawk and Western is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Blackhawk Growth Corp and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Blackhawk Growth 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 Blackhawk Growth Corp are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Blackhawk Growth i.e., Blackhawk Growth and Western Asset go up and down completely randomly.

Pair Corralation between Blackhawk Growth and Western Asset

Assuming the 90 days horizon Blackhawk Growth Corp is expected to under-perform the Western Asset. In addition to that, Blackhawk Growth is 20.81 times more volatile than Western Asset Global. It trades about -0.12 of its total potential returns per unit of risk. Western Asset Global is currently generating about -0.19 per unit of volatility. If you would invest  1,247  in Western Asset Global on September 13, 2024 and sell it today you would lose (77.00) from holding Western Asset Global or give up 6.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Blackhawk Growth Corp  vs.  Western Asset Global

Blackhawk Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackhawk Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Western Asset Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Western Asset is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackhawk Growth and Western Asset

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

The idea behind Blackhawk Growth Corp and Western Asset Global 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.