Correlation Between AT S and Blackrock Midcap

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

By analyzing existing cross correlation between AT S Austria and Blackrock Midcap Index, you can compare the effects of market volatilities on AT S and Blackrock Midcap 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 AT S with a short position of Blackrock Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and Blackrock Midcap.

Diversification Opportunities for AT S and Blackrock Midcap

-0.36

Correlation Coefficient

AT S  Blackrock Midcap

Very good diversification

The 3 months correlation between ATS and Blackrock is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and Blackrock Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Midcap Index and AT S 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 AT S Austria are associated (or correlated) with Blackrock Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Midcap Index has no effect on the direction of AT S i.e., AT S and Blackrock Midcap go up and down completely randomly.

Pair Corralation between AT S and Blackrock Midcap

Assuming the 90 days trading horizon AT S Austria is expected to generate 3.6 times more return on investment than Blackrock Midcap. However, AT S is 3.6 times more volatile than Blackrock Midcap Index. It trades about 0.1 of its potential returns per unit of risk. Blackrock Midcap Index is currently generating about -0.04 per unit of risk. If you would invest  1,175  in AT S Austria on December 25, 2024 and sell it today you would earn a total of  225.00  from holding AT S Austria or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

AT S Austria  vs.  Blackrock Midcap Index

AT S Austria

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, AT S demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Midcap Index

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AT S and Blackrock Midcap

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

The idea behind AT S Austria and Blackrock Midcap Index 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.