Correlation Between Blackhawk Growth and 3i Group

Can any of the company-specific risk be diversified away by investing in both Blackhawk Growth and 3i Group 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 3i Group 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 3i Group plc, you can compare the effects of market volatilities on Blackhawk Growth and 3i Group 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 3i Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackhawk Growth and 3i Group.

Diversification Opportunities for Blackhawk Growth and 3i Group

-0.34

Correlation Coefficient

Blackhawk Growth  3i Group

Very good diversification

The 3 months correlation between Blackhawk and TGOPF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Blackhawk Growth Corp and 3i Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3i Group plc 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 3i Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3i Group plc has no effect on the direction of Blackhawk Growth i.e., Blackhawk Growth and 3i Group go up and down completely randomly.

Pair Corralation between Blackhawk Growth and 3i Group

Assuming the 90 days horizon Blackhawk Growth Corp is expected to under-perform the 3i Group. In addition to that, Blackhawk Growth is 4.67 times more volatile than 3i Group plc. It trades about -0.12 of its total potential returns per unit of risk. 3i Group plc is currently generating about 0.11 per unit of volatility. If you would invest  4,126  in 3i Group plc on September 3, 2024 and sell it today you would earn a total of  679.00  from holding 3i Group plc or generate 16.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Blackhawk Growth Corp  vs.  3i Group plc

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.

3i Group plc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 3i Group plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, 3i Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackhawk Growth and 3i Group

The main advantage of trading using opposite Blackhawk Growth and 3i Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackhawk Growth position performs unexpectedly, 3i Group 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 3i Group will offset losses from the drop in 3i Group's long position.

The idea behind Blackhawk Growth Corp and 3i Group plc 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 Global Correlations module to find global opportunities by holding instruments from different markets.