Correlation Between Black Rock and GQG Partners

Can any of the company-specific risk be diversified away by investing in both Black Rock and GQG Partners 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 GQG Partners 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 GQG Partners DRC, you can compare the effects of market volatilities on Black Rock and GQG Partners 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 GQG Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Rock and GQG Partners.

Diversification Opportunities for Black Rock and GQG Partners

0.52

Correlation Coefficient

Black Rock  GQG Partners

Very weak diversification

The 3 months correlation between Black and GQG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Black Rock Mining and GQG Partners DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GQG Partners DRC 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 GQG Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GQG Partners DRC has no effect on the direction of Black Rock i.e., Black Rock and GQG Partners go up and down completely randomly.

Pair Corralation between Black Rock and GQG Partners

Assuming the 90 days trading horizon Black Rock Mining is expected to under-perform the GQG Partners. But the stock apears to be less risky and, when comparing its historical volatility, Black Rock Mining is 1.15 times less risky than GQG Partners. The stock trades about -0.37 of its potential returns per unit of risk. The GQG Partners DRC is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  262.00  in GQG Partners DRC on September 4, 2024 and sell it today you would lose (53.00) from holding GQG Partners DRC or give up 20.23% 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.  GQG Partners DRC

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.

GQG Partners DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GQG Partners DRC 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 technical and fundamental 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 GQG Partners

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

The idea behind Black Rock Mining and GQG Partners DRC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.