Correlation Between Black Iron and East Africa
Can any of the company-specific risk be diversified away by investing in both Black Iron and East Africa 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 Iron and East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Iron and East Africa Metals, you can compare the effects of market volatilities on Black Iron and East Africa 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 Iron with a short position of East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Iron and East Africa.
Diversification Opportunities for Black Iron and East Africa
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and East is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Black Iron and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals and Black Iron 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 Iron are associated (or correlated) with East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Black Iron i.e., Black Iron and East Africa go up and down completely randomly.
Pair Corralation between Black Iron and East Africa
Assuming the 90 days trading horizon Black Iron is expected to generate 0.87 times more return on investment than East Africa. However, Black Iron is 1.14 times less risky than East Africa. It trades about 0.05 of its potential returns per unit of risk. East Africa Metals is currently generating about -0.02 per unit of risk. If you would invest 12.00 in Black Iron on September 13, 2025 and sell it today you would earn a total of 1.00 from holding Black Iron or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Iron vs. East Africa Metals
Performance |
| Timeline |
| Black Iron |
| East Africa Metals |
Black Iron and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Iron and East Africa
The main advantage of trading using opposite Black Iron and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Iron position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's long position.| Black Iron vs. East Africa Metals | Black Iron vs. Quartz Mountain Resources | Black Iron vs. Commerce Resources Corp | Black Iron vs. Aton Resources |
| East Africa vs. Vizsla Silver Corp | East Africa vs. Foran Mining | East Africa vs. Altius Minerals | East Africa vs. Northern Dynasty Minerals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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