Correlation Between BlackRock and Global Pole

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

By analyzing existing cross correlation between BlackRock and Global Pole Trusion, you can compare the effects of market volatilities on BlackRock and Global Pole 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 Global Pole. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Global Pole.

Diversification Opportunities for BlackRock and Global Pole

0.85

Correlation Coefficient

BlackRock  Global Pole

Very poor diversification

The 3 months correlation between BlackRock and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Global Pole Trusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Pole Trusion 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 Global Pole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Pole Trusion has no effect on the direction of BlackRock i.e., BlackRock and Global Pole go up and down completely randomly.

Pair Corralation between BlackRock and Global Pole

If you would invest  102,641  in BlackRock on September 26, 2024 and sell it today you would earn a total of  2,842  from holding BlackRock or generate 2.77% return on investment over 90 days.

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

BlackRock  vs.  Global Pole Trusion

BlackRock

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Pole Trusion

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Pole Trusion are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Global Pole exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock and Global Pole

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

The idea behind BlackRock and Global Pole Trusion 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..