Correlation Between BlackRock and Hargreaves Lansdown

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

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

Diversification Opportunities for BlackRock and Hargreaves Lansdown

-0.4

Correlation Coefficient

BlackRock  Hargreaves Lansdown

Very good diversification

The 3 months correlation between BlackRock and Hargreaves is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Hargreaves Lansdown plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Lansdown plc and BlackRock 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 are associated (or correlated) with Hargreaves Lansdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Lansdown plc has no effect on the direction of BlackRock i.e., BlackRock and Hargreaves Lansdown go up and down completely randomly.

Pair Corralation between BlackRock and Hargreaves Lansdown

Considering the 90-day investment horizon BlackRock is expected to under-perform the Hargreaves Lansdown. In addition to that, BlackRock is 1.28 times more volatile than Hargreaves Lansdown plc. It trades about -0.07 of its total potential returns per unit of risk. Hargreaves Lansdown plc is currently generating about 0.15 per unit of volatility. If you would invest  1,286  in Hargreaves Lansdown plc on December 23, 2024 and sell it today you would earn a total of  145.00  from holding Hargreaves Lansdown plc or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

BlackRock  vs.  Hargreaves Lansdown plc

BlackRock

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Hargreaves Lansdown plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hargreaves Lansdown plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Hargreaves Lansdown may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BlackRock and Hargreaves Lansdown

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

The idea behind BlackRock and Hargreaves Lansdown plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.