Correlation Between Blackrock Moderate and Catalystmap Global

Can any of the company-specific risk be diversified away by investing in both Blackrock Moderate and Catalystmap Global 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 Catalystmap Global 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 Catalystmap Global Equity, you can compare the effects of market volatilities on Blackrock Moderate and Catalystmap Global 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 Catalystmap Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Moderate and Catalystmap Global.

Diversification Opportunities for Blackrock Moderate and Catalystmap Global

0.67

Correlation Coefficient

Blackrock Moderate  Catalystmap Global

Poor diversification

The 3 months correlation between Blackrock and Catalystmap is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and Catalystmap Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global Equity 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 Catalystmap Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global Equity has no effect on the direction of Blackrock Moderate i.e., Blackrock Moderate and Catalystmap Global go up and down completely randomly.

Pair Corralation between Blackrock Moderate and Catalystmap Global

Assuming the 90 days horizon Blackrock Moderate Prepared is expected to generate 0.48 times more return on investment than Catalystmap Global. However, Blackrock Moderate Prepared is 2.1 times less risky than Catalystmap Global. It trades about -0.39 of its potential returns per unit of risk. Catalystmap Global Equity is currently generating about -0.37 per unit of risk. If you would invest  1,353  in Blackrock Moderate Prepared on October 8, 2024 and sell it today you would lose (77.00) from holding Blackrock Moderate Prepared or give up 5.69% 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.  Catalystmap Global Equity

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.

Catalystmap Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blackrock Moderate and Catalystmap Global

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

The idea behind Blackrock Moderate Prepared and Catalystmap Global Equity 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.