Correlation Between BlackRock MIT and CCSB Financial

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

By analyzing existing cross correlation between BlackRock MIT II and CCSB Financial Corp, you can compare the effects of market volatilities on BlackRock MIT and CCSB Financial 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 MIT with a short position of CCSB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock MIT and CCSB Financial.

Diversification Opportunities for BlackRock MIT and CCSB Financial

0.73

Correlation Coefficient

BlackRock MIT  CCSB Financial

Poor diversification

The 3 months correlation between BlackRock and CCSB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock MIT II and CCSB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCSB Financial Corp and BlackRock MIT 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 MIT II are associated (or correlated) with CCSB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCSB Financial Corp has no effect on the direction of BlackRock MIT i.e., BlackRock MIT and CCSB Financial go up and down completely randomly.

Pair Corralation between BlackRock MIT and CCSB Financial

Considering the 90-day investment horizon BlackRock MIT II is expected to generate 0.35 times more return on investment than CCSB Financial. However, BlackRock MIT II is 2.83 times less risky than CCSB Financial. It trades about -0.11 of its potential returns per unit of risk. CCSB Financial Corp is currently generating about -0.15 per unit of risk. If you would invest  1,103  in BlackRock MIT II on October 9, 2024 and sell it today you would lose (48.00) from holding BlackRock MIT II or give up 4.35% of portfolio value over 90 days.

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

BlackRock MIT II  vs.  CCSB Financial Corp

BlackRock MIT II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock MIT II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, BlackRock MIT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CCSB Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCSB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BlackRock MIT and CCSB Financial

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

The idea behind BlackRock MIT II and CCSB Financial Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.