Correlation Between Blackrock Allocation and Lifex Income

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

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

Diversification Opportunities for Blackrock Allocation and Lifex Income

0.0

Correlation Coefficient

Blackrock Allocation  Lifex Income

Pay attention - limited upside

The 3 months correlation between Blackrock and Lifex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Allocation Target and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income and Blackrock Allocation 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 Allocation Target are associated (or correlated) with Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of Blackrock Allocation i.e., Blackrock Allocation and Lifex Income go up and down completely randomly.

Pair Corralation between Blackrock Allocation and Lifex Income

Assuming the 90 days horizon Blackrock Allocation Target is expected to generate 0.22 times more return on investment than Lifex Income. However, Blackrock Allocation Target is 4.46 times less risky than Lifex Income. It trades about 0.19 of its potential returns per unit of risk. Lifex Income is currently generating about 0.0 per unit of risk. If you would invest  822.00  in Blackrock Allocation Target on October 7, 2024 and sell it today you would earn a total of  125.00  from holding Blackrock Allocation Target or generate 15.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	49.19%
Values	Daily Returns

Blackrock Allocation Target  vs.  Lifex Income

Blackrock Allocation

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Allocation Target are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Allocation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lifex Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lifex Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Lifex Income 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 Allocation and Lifex Income

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

The idea behind Blackrock Allocation Target and Lifex Income 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.