Correlation Between Global Core and Blackrock Resources

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

By analyzing existing cross correlation between Global E Portfolio and Blackrock Resources Commodities, you can compare the effects of market volatilities on Global Core and Blackrock Resources 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 Global Core with a short position of Blackrock Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Core and Blackrock Resources.

Diversification Opportunities for Global Core and Blackrock Resources

0.03

Correlation Coefficient

Global Core  Blackrock Resources

Significant diversification

The 3 months correlation between Global and Blackrock is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global E Portfolio and Blackrock Resources Commoditie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Resources and Global Core 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 Global E Portfolio are associated (or correlated) with Blackrock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Resources has no effect on the direction of Global Core i.e., Global Core and Blackrock Resources go up and down completely randomly.

Pair Corralation between Global Core and Blackrock Resources

Assuming the 90 days horizon Global E Portfolio is expected to under-perform the Blackrock Resources. In addition to that, Global Core is 1.16 times more volatile than Blackrock Resources Commodities. It trades about -0.04 of its total potential returns per unit of risk. Blackrock Resources Commodities is currently generating about 0.2 per unit of volatility. If you would invest  831.00  in Blackrock Resources Commodities on December 29, 2024 and sell it today you would earn a total of  103.00  from holding Blackrock Resources Commodities or generate 12.39% return on investment over 90 days.

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

Global E Portfolio  vs.  Blackrock Resources Commoditie

Global E Portfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global E Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Global Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Resources Commodities are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Blackrock Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Global Core and Blackrock Resources

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

The idea behind Global E Portfolio and Blackrock Resources Commodities 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.