Correlation Between BlackRock MIT and Equitable

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

Diversification Opportunities for BlackRock MIT and Equitable

0.56

Correlation Coefficient

BlackRock MIT  Equitable

Very weak diversification

The 3 months correlation between BlackRock and Equitable is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock MIT II and Equitable Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Group 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 Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Group has no effect on the direction of BlackRock MIT i.e., BlackRock MIT and Equitable go up and down completely randomly.

Pair Corralation between BlackRock MIT and Equitable

Considering the 90-day investment horizon BlackRock MIT II is expected to under-perform the Equitable. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock MIT II is 4.47 times less risky than Equitable. The stock trades about -0.3 of its potential returns per unit of risk. The Equitable Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,202  in Equitable Group on October 11, 2024 and sell it today you would earn a total of  23.00  from holding Equitable Group or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

BlackRock MIT II  vs.  Equitable Group

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.

Equitable Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equitable Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Equitable is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock MIT and Equitable

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

The idea behind BlackRock MIT II and Equitable Group 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.