Correlation Between BLOC and Marinade
Can any of the company-specific risk be diversified away by investing in both BLOC and Marinade 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 BLOC and Marinade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLOC and Marinade, you can compare the effects of market volatilities on BLOC and Marinade 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 BLOC with a short position of Marinade. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLOC and Marinade.
Diversification Opportunities for BLOC and Marinade
Average diversification
The 3 months correlation between BLOC and Marinade is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BLOC and Marinade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinade and BLOC 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 BLOC are associated (or correlated) with Marinade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marinade has no effect on the direction of BLOC i.e., BLOC and Marinade go up and down completely randomly.
Pair Corralation between BLOC and Marinade
If you would invest 0.03 in BLOC on January 29, 2024 and sell it today you would earn a total of 0.00 from holding BLOC or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 2.27% |
Values | Daily Returns |
BLOC vs. Marinade
Performance |
Timeline |
BLOC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marinade |
BLOC and Marinade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BLOC and Marinade
The main advantage of trading using opposite BLOC and Marinade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLOC position performs unexpectedly, Marinade 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 Marinade will offset losses from the drop in Marinade's long position.The idea behind BLOC and Marinade 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |