Correlation Between Equity Growth and Blackrock Bal

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

By analyzing existing cross correlation between Equity Growth Fund and Blackrock Bal Cap, you can compare the effects of market volatilities on Equity Growth and Blackrock Bal 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 Equity Growth with a short position of Blackrock Bal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Blackrock Bal.

Diversification Opportunities for Equity Growth and Blackrock Bal

0.58

Correlation Coefficient

Equity Growth  Blackrock Bal

Very weak diversification

The 3 months correlation between Equity and Blackrock is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund and Blackrock Bal Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Bal Cap and Equity Growth 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 Equity Growth Fund are associated (or correlated) with Blackrock Bal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Bal Cap has no effect on the direction of Equity Growth i.e., Equity Growth and Blackrock Bal go up and down completely randomly.

Pair Corralation between Equity Growth and Blackrock Bal

Assuming the 90 days horizon Equity Growth Fund is expected to generate 1.76 times more return on investment than Blackrock Bal. However, Equity Growth is 1.76 times more volatile than Blackrock Bal Cap. It trades about -0.02 of its potential returns per unit of risk. Blackrock Bal Cap is currently generating about -0.13 per unit of risk. If you would invest  3,416  in Equity Growth Fund on September 23, 2024 and sell it today you would lose (16.00) from holding Equity Growth Fund or give up 0.47% of portfolio value over 90 days.

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

Equity Growth Fund  vs.  Blackrock Bal Cap

Equity Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Growth Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Equity Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Bal Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Bal Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Bal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Equity Growth and Blackrock Bal

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

The idea behind Equity Growth Fund and Blackrock Bal Cap 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.