Correlation Between Blackrock Moderate and Bats Series

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

By analyzing existing cross correlation between Blackrock Moderate Prepared and Bats Series C, you can compare the effects of market volatilities on Blackrock Moderate and Bats Series 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 Moderate with a short position of Bats Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Moderate and Bats Series.

Diversification Opportunities for Blackrock Moderate and Bats Series

0.71

Correlation Coefficient

Blackrock Moderate  Bats Series

Poor diversification

The 3 months correlation between Blackrock and Bats is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and Bats Series C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series C and Blackrock Moderate 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 Moderate Prepared are associated (or correlated) with Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series C has no effect on the direction of Blackrock Moderate i.e., Blackrock Moderate and Bats Series go up and down completely randomly.

Pair Corralation between Blackrock Moderate and Bats Series

Assuming the 90 days horizon Blackrock Moderate Prepared is expected to under-perform the Bats Series. In addition to that, Blackrock Moderate is 2.78 times more volatile than Bats Series C. It trades about -0.39 of its total potential returns per unit of risk. Bats Series C is currently generating about -0.51 per unit of volatility. If you would invest  915.00  in Bats Series C on October 8, 2024 and sell it today you would lose (25.00) from holding Bats Series C or give up 2.73% of portfolio value over 90 days.

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

Blackrock Moderate Prepared  vs.  Bats Series C

Blackrock Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Moderate Prepared has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bats Series C

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bats Series C has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Bats Series 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 Moderate and Bats Series

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

The idea behind Blackrock Moderate Prepared and Bats Series C 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.