Correlation Between Blackrock Incm and Astor Longshort

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

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

Diversification Opportunities for Blackrock Incm and Astor Longshort

0.27

Correlation Coefficient

Blackrock Incm  Astor Longshort

Modest diversification

The 3 months correlation between Blackrock and Astor is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Incm Ptf and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Blackrock Incm 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 Blackrock Incm Ptf are associated (or correlated) with Astor Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Longshort has no effect on the direction of Blackrock Incm i.e., Blackrock Incm and Astor Longshort go up and down completely randomly.

Pair Corralation between Blackrock Incm and Astor Longshort

Assuming the 90 days horizon Blackrock Incm Ptf is expected to generate 0.67 times more return on investment than Astor Longshort. However, Blackrock Incm Ptf is 1.49 times less risky than Astor Longshort. It trades about 0.09 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about -0.05 per unit of risk. If you would invest  996.00  in Blackrock Incm Ptf on December 29, 2024 and sell it today you would earn a total of  19.00  from holding Blackrock Incm Ptf or generate 1.91% return on investment over 90 days.

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

Blackrock Incm Ptf  vs.  Astor Longshort Fund

Blackrock Incm Ptf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Incm Ptf are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Blackrock Incm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Astor Longshort

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Blackrock Incm and Astor Longshort

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

The idea behind Blackrock Incm Ptf and Astor Longshort Fund 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .