Correlation Between Black Knight and US GoldMining

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Can any of the company-specific risk be diversified away by investing in both Black Knight and US GoldMining 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 Knight and US GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Knight and US GoldMining Common, you can compare the effects of market volatilities on Black Knight and US GoldMining 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 Knight with a short position of US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Knight and US GoldMining.

Diversification Opportunities for Black Knight and US GoldMining

-0.89
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Black and USGO is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Black Knight and US GoldMining Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Common and Black Knight 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 Knight are associated (or correlated) with US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Common has no effect on the direction of Black Knight i.e., Black Knight and US GoldMining go up and down completely randomly.

Pair Corralation between Black Knight and US GoldMining

If you would invest  7,576  in Black Knight on December 3, 2023 and sell it today you would earn a total of  0.00  from holding Black Knight or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy4.76%
ValuesDaily Returns

Black Knight  vs.  US GoldMining Common

 Performance 
       Timeline  
Black Knight 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Black Knight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, Black Knight is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
US GoldMining Common 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days US GoldMining Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Black Knight and US GoldMining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Black Knight and US GoldMining

The main advantage of trading using opposite Black Knight and US GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Knight position performs unexpectedly, US GoldMining 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 US GoldMining will offset losses from the drop in US GoldMining's long position.
The idea behind Black Knight and US GoldMining Common 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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