Correlation Between HP and BlackRock Global

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

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

Diversification Opportunities for HP and BlackRock Global

0.66

Correlation Coefficient

HP  BlackRock Global

Poor diversification

The 3 months correlation between HP and BlackRock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and BlackRock Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Global Opp and HP 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 HP Inc are associated (or correlated) with BlackRock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Global Opp has no effect on the direction of HP i.e., HP and BlackRock Global go up and down completely randomly.

Pair Corralation between HP and BlackRock Global

Considering the 90-day investment horizon HP Inc is expected to generate 3.65 times more return on investment than BlackRock Global. However, HP is 3.65 times more volatile than BlackRock Global Opportunities. It trades about 0.05 of its potential returns per unit of risk. BlackRock Global Opportunities is currently generating about 0.12 per unit of risk. If you would invest  3,310  in HP Inc on September 12, 2024 and sell it today you would earn a total of  184.00  from holding HP Inc or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

HP Inc  vs.  BlackRock Global Opportunities

HP Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BlackRock Global Opp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Global Opportunities are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BlackRock Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HP and BlackRock Global

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

The idea behind HP Inc and BlackRock Global Opportunities 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.