Correlation Between Black Rock and Duketon Mining

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

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

Diversification Opportunities for Black Rock and Duketon Mining

0.57

Correlation Coefficient

Black Rock  Duketon Mining

Very weak diversification

The 3 months correlation between Black and Duketon is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining and Black Rock 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 Black Rock Mining are associated (or correlated) with Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of Black Rock i.e., Black Rock and Duketon Mining go up and down completely randomly.

Pair Corralation between Black Rock and Duketon Mining

Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the Duketon Mining. In addition to that, Black Rock is 1.04 times more volatile than Duketon Mining. It trades about -0.03 of its total potential returns per unit of risk. Duketon Mining is currently generating about -0.03 per unit of volatility. If you would invest  37.00  in Duketon Mining on September 25, 2024 and sell it today you would lose (27.00) from holding Duketon Mining or give up 72.97% of portfolio value over 90 days.

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

Black Rock Mining  vs.  Duketon Mining

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.

Duketon Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duketon 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 primary 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 Black Rock and Duketon Mining

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

The idea behind Black Rock Mining and Duketon 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.