Correlation Between Stamper Oil and BlackRock

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

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

Diversification Opportunities for Stamper Oil and BlackRock

-0.32

Correlation Coefficient

Stamper Oil  BlackRock

Very good diversification

The 3 months correlation between Stamper and BlackRock is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Stamper Oil Gas and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock and Stamper Oil 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 Stamper Oil Gas are associated (or correlated) with BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Stamper Oil i.e., Stamper Oil and BlackRock go up and down completely randomly.

Pair Corralation between Stamper Oil and BlackRock

Assuming the 90 days horizon Stamper Oil Gas is expected to generate 16.67 times more return on investment than BlackRock. However, Stamper Oil is 16.67 times more volatile than BlackRock. It trades about 0.06 of its potential returns per unit of risk. BlackRock is currently generating about 0.17 per unit of risk. If you would invest  1.22  in Stamper Oil Gas on October 1, 2024 and sell it today you would lose (0.22) from holding Stamper Oil Gas or give up 18.03% of portfolio value over 90 days.

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

Stamper Oil Gas  vs.  BlackRock

Stamper Oil Gas

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stamper Oil Gas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Stamper Oil reported solid returns over the last few months and may actually be approaching a breakup point.

BlackRock

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Stamper Oil and BlackRock

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

The idea behind Stamper Oil Gas and BlackRock 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.