Correlation Between Blackrock and Pax High
Can any of the company-specific risk be diversified away by investing in both Blackrock and Pax High 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 and Pax High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Hi Yld and Pax High Yield, you can compare the effects of market volatilities on Blackrock and Pax High 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 with a short position of Pax High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Pax High.
Diversification Opportunities for Blackrock and Pax High
Almost no diversification
The 3 months correlation between Blackrock and Pax is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Hi Yld and Pax High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax High Yield and Blackrock 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 Hi Yld are associated (or correlated) with Pax High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax High Yield has no effect on the direction of Blackrock i.e., Blackrock and Pax High go up and down completely randomly.
Pair Corralation between Blackrock and Pax High
Assuming the 90 days horizon Blackrock Hi Yld is expected to generate 1.18 times more return on investment than Pax High. However, Blackrock is 1.18 times more volatile than Pax High Yield. It trades about 0.21 of its potential returns per unit of risk. Pax High Yield is currently generating about 0.23 per unit of risk. If you would invest 716.00 in Blackrock Hi Yld on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Blackrock Hi Yld or generate 0.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Blackrock Hi Yld vs. Pax High Yield
Performance |
Timeline |
Blackrock Hi Yld |
Pax High Yield |
Blackrock and Pax High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blackrock and Pax High
The main advantage of trading using opposite Blackrock and Pax High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock position performs unexpectedly, Pax High 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 Pax High will offset losses from the drop in Pax High's long position.Blackrock vs. Blackrock California Municipal | Blackrock vs. Blackrock Balanced Capital | Blackrock vs. Blackrock Eurofund Class | Blackrock vs. Blackrock Funds |
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Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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