Correlation Between Blackrock Moderate and Lifex Inflation

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

Diversification Opportunities for Blackrock Moderate and Lifex Inflation

-0.02

Correlation Coefficient

Blackrock Moderate  Lifex Inflation

Good diversification

The 3 months correlation between Blackrock and Lifex is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot 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 Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of Blackrock Moderate i.e., Blackrock Moderate and Lifex Inflation go up and down completely randomly.

Pair Corralation between Blackrock Moderate and Lifex Inflation

If you would invest  1,334  in Blackrock Moderate Prepared on September 16, 2024 and sell it today you would earn a total of  13.00  from holding Blackrock Moderate Prepared or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Blackrock Moderate Prepared  vs.  Lifex Inflation Protected Inco

Blackrock Moderate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Moderate Prepared are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Lifex Inflation Prot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lifex Inflation Protected Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Lifex Inflation 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 Lifex Inflation

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

The idea behind Blackrock Moderate Prepared and Lifex Inflation Protected Income 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.