Correlation Between BlackRock and Gores Holdings

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

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

Diversification Opportunities for BlackRock and Gores Holdings

-0.22

Correlation Coefficient

BlackRock  Gores Holdings

Very good diversification

The 3 months correlation between BlackRock and Gores is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX and BlackRock 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 are associated (or correlated) with Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of BlackRock i.e., BlackRock and Gores Holdings go up and down completely randomly.

Pair Corralation between BlackRock and Gores Holdings

Considering the 90-day investment horizon BlackRock is expected to generate 3.16 times more return on investment than Gores Holdings. However, BlackRock is 3.16 times more volatile than Gores Holdings IX. It trades about 0.29 of its potential returns per unit of risk. Gores Holdings IX is currently generating about -0.13 per unit of risk. If you would invest  88,076  in BlackRock on September 12, 2024 and sell it today you would earn a total of  18,450  from holding BlackRock or generate 20.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

BlackRock  vs.  Gores Holdings IX

BlackRock

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock disclosed solid returns over the last few months and may actually be approaching a breakup point.

Gores Holdings IX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gores Holdings IX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gores Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock and Gores Holdings

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

The idea behind BlackRock and Gores Holdings IX 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.