Correlation Between BlackRock Core and Blackrock Multi

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

By analyzing existing cross correlation between BlackRock Core Bond and Blackrock Multi Sector, you can compare the effects of market volatilities on BlackRock Core and Blackrock Multi 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 Core with a short position of Blackrock Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Core and Blackrock Multi.

Diversification Opportunities for BlackRock Core and Blackrock Multi

0.59

Correlation Coefficient

BlackRock Core  Blackrock Multi

Very weak diversification

The 3 months correlation between BlackRock and Blackrock is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Core Bond and Blackrock Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Multi Sector and BlackRock Core 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 Core Bond are associated (or correlated) with Blackrock Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Multi Sector has no effect on the direction of BlackRock Core i.e., BlackRock Core and Blackrock Multi go up and down completely randomly.

Pair Corralation between BlackRock Core and Blackrock Multi

Considering the 90-day investment horizon BlackRock Core Bond is expected to generate 1.34 times more return on investment than Blackrock Multi. However, BlackRock Core is 1.34 times more volatile than Blackrock Multi Sector. It trades about 0.09 of its potential returns per unit of risk. Blackrock Multi Sector is currently generating about 0.08 per unit of risk. If you would invest  915.00  in BlackRock Core Bond on September 12, 2024 and sell it today you would earn a total of  207.50  from holding BlackRock Core Bond or generate 22.68% return on investment over 90 days.

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

BlackRock Core Bond  vs.  Blackrock Multi Sector

BlackRock Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Core Bond has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, BlackRock Core is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Blackrock Multi Sector

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Multi Sector are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Blackrock Multi is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock Core and Blackrock Multi

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

The idea behind BlackRock Core Bond and Blackrock Multi Sector 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.