Correlation Between Autosports and Black Rock

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

By analyzing existing cross correlation between Autosports Group and Black Rock Mining, you can compare the effects of market volatilities on Autosports and Black Rock 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 Autosports with a short position of Black Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Black Rock.

Diversification Opportunities for Autosports and Black Rock

0.75

Correlation Coefficient

Autosports  Black Rock

Poor diversification

The 3 months correlation between Autosports and Black is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Black Rock Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Rock Mining and Autosports 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 Autosports Group are associated (or correlated) with Black Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Rock Mining has no effect on the direction of Autosports i.e., Autosports and Black Rock go up and down completely randomly.

Pair Corralation between Autosports and Black Rock

Assuming the 90 days trading horizon Autosports Group is expected to generate 0.44 times more return on investment than Black Rock. However, Autosports Group is 2.27 times less risky than Black Rock. It trades about -0.11 of its potential returns per unit of risk. Black Rock Mining is currently generating about -0.17 per unit of risk. If you would invest  199.00  in Autosports Group on September 22, 2024 and sell it today you would lose (26.00) from holding Autosports Group or give up 13.07% of portfolio value over 90 days.

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

Autosports Group  vs.  Black Rock Mining

Autosports Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autosports Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Black Rock Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Rock Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Autosports and Black Rock

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

The idea behind Autosports Group and Black Rock Mining 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..