Correlation Between BlackRock TCP and Carbon Streaming

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

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

Diversification Opportunities for BlackRock TCP and Carbon Streaming

-0.42

Correlation Coefficient

BlackRock TCP  Carbon Streaming

Very good diversification

The 3 months correlation between BlackRock and Carbon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock TCP Capital and Carbon Streaming Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Streaming Corp and BlackRock TCP 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 BlackRock TCP Capital are associated (or correlated) with Carbon Streaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Streaming Corp has no effect on the direction of BlackRock TCP i.e., BlackRock TCP and Carbon Streaming go up and down completely randomly.

Pair Corralation between BlackRock TCP and Carbon Streaming

Given the investment horizon of 90 days BlackRock TCP Capital is expected to generate 0.2 times more return on investment than Carbon Streaming. However, BlackRock TCP Capital is 5.0 times less risky than Carbon Streaming. It trades about -0.02 of its potential returns per unit of risk. Carbon Streaming Corp is currently generating about -0.01 per unit of risk. If you would invest  1,034  in BlackRock TCP Capital on October 3, 2024 and sell it today you would lose (163.00) from holding BlackRock TCP Capital or give up 15.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

BlackRock TCP Capital  vs.  Carbon Streaming Corp

BlackRock TCP Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock TCP Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BlackRock TCP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carbon Streaming Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Carbon Streaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock TCP and Carbon Streaming

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

The idea behind BlackRock TCP Capital and Carbon Streaming Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.