Correlation Between Carbon Streaming and BlackRock Investment

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

By analyzing existing cross correlation between Carbon Streaming Corp and BlackRock Investment Quality, you can compare the effects of market volatilities on Carbon Streaming and BlackRock Investment 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 Carbon Streaming with a short position of BlackRock Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carbon Streaming and BlackRock Investment.

Diversification Opportunities for Carbon Streaming and BlackRock Investment

-0.13

Correlation Coefficient

Carbon Streaming  BlackRock Investment

Good diversification

The 3 months correlation between Carbon and BlackRock is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp and BlackRock Investment Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Investment and Carbon Streaming 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 Carbon Streaming Corp are associated (or correlated) with BlackRock Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Investment has no effect on the direction of Carbon Streaming i.e., Carbon Streaming and BlackRock Investment go up and down completely randomly.

Pair Corralation between Carbon Streaming and BlackRock Investment

Assuming the 90 days horizon Carbon Streaming Corp is expected to under-perform the BlackRock Investment. In addition to that, Carbon Streaming is 7.89 times more volatile than BlackRock Investment Quality. It trades about -0.01 of its total potential returns per unit of risk. BlackRock Investment Quality is currently generating about 0.02 per unit of volatility. If you would invest  1,045  in BlackRock Investment Quality on October 21, 2024 and sell it today you would earn a total of  82.00  from holding BlackRock Investment Quality or generate 7.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

Carbon Streaming Corp  vs.  BlackRock Investment Quality

Carbon Streaming Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Streaming Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carbon Streaming may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BlackRock Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Investment Quality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Carbon Streaming and BlackRock Investment

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

The idea behind Carbon Streaming Corp and BlackRock Investment Quality 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.