Correlation Between Blackrock Commodity and Commodityrealreturn

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

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

Diversification Opportunities for Blackrock Commodity and Commodityrealreturn

0.73

Correlation Coefficient

Blackrock Commodity  Commodityrealreturn

Poor diversification

The 3 months correlation between Blackrock and Commodityrealreturn is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Commodity Strategies and Commodityrealreturn Strategy F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodityrealreturn and Blackrock Commodity 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 Commodity Strategies are associated (or correlated) with Commodityrealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodityrealreturn has no effect on the direction of Blackrock Commodity i.e., Blackrock Commodity and Commodityrealreturn go up and down completely randomly.

Pair Corralation between Blackrock Commodity and Commodityrealreturn

Assuming the 90 days horizon Blackrock Commodity Strategies is expected to under-perform the Commodityrealreturn. In addition to that, Blackrock Commodity is 1.04 times more volatile than Commodityrealreturn Strategy Fund. It trades about -0.02 of its total potential returns per unit of risk. Commodityrealreturn Strategy Fund is currently generating about -0.02 per unit of volatility. If you would invest  1,252  in Commodityrealreturn Strategy Fund on September 29, 2024 and sell it today you would lose (25.00) from holding Commodityrealreturn Strategy Fund or give up 2.0% of portfolio value over 90 days.

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

Blackrock Commodity Strategies  vs.  Commodityrealreturn Strategy F

Blackrock Commodity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Commodity Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Commodityrealreturn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commodityrealreturn Strategy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Commodityrealreturn 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 Commodity and Commodityrealreturn

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

The idea behind Blackrock Commodity Strategies and Commodityrealreturn Strategy 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.