Correlation Between Blackrock Alternative and Blackrock Global

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

By analyzing existing cross correlation between Blackrock Alternative Capital and Blackrock Global Long, you can compare the effects of market volatilities on Blackrock Alternative and Blackrock Global 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 Alternative with a short position of Blackrock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Alternative and Blackrock Global.

Diversification Opportunities for Blackrock Alternative and Blackrock Global

0.29

Correlation Coefficient

Blackrock Alternative  Blackrock Global

Modest diversification

The 3 months correlation between Blackrock and Blackrock is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Alternative Capital and Blackrock Global Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Global Long and Blackrock Alternative 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 Alternative Capital are associated (or correlated) with Blackrock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Global Long has no effect on the direction of Blackrock Alternative i.e., Blackrock Alternative and Blackrock Global go up and down completely randomly.

Pair Corralation between Blackrock Alternative and Blackrock Global

Assuming the 90 days horizon Blackrock Alternative is expected to generate 1.66 times less return on investment than Blackrock Global. But when comparing it to its historical volatility, Blackrock Alternative Capital is 2.24 times less risky than Blackrock Global. It trades about 0.16 of its potential returns per unit of risk. Blackrock Global Long is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,322  in Blackrock Global Long on December 31, 2024 and sell it today you would earn a total of  54.00  from holding Blackrock Global Long or generate 4.08% return on investment over 90 days.

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

Blackrock Alternative Capital  vs.  Blackrock Global Long

Blackrock Alternative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Alternative Capital are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Blackrock Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Global Long

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Global Long are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Global 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 Alternative and Blackrock Global

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

The idea behind Blackrock Alternative Capital and Blackrock Global Long 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.