Correlation Between BlackRock and JAN Old

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

By analyzing existing cross correlation between BlackRock and JAN Old, you can compare the effects of market volatilities on BlackRock and JAN Old 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 JAN Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and JAN Old.

Diversification Opportunities for BlackRock and JAN Old

0.0

Correlation Coefficient

BlackRock  JAN Old

Pay attention - limited upside

The 3 months correlation between BlackRock and JAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and JAN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAN Old 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 JAN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAN Old has no effect on the direction of BlackRock i.e., BlackRock and JAN Old go up and down completely randomly.

Pair Corralation between BlackRock and JAN Old

Considering the 90-day investment horizon BlackRock is expected to generate 0.07 times more return on investment than JAN Old. However, BlackRock is 14.56 times less risky than JAN Old. It trades about 0.15 of its potential returns per unit of risk. JAN Old is currently generating about -0.21 per unit of risk. If you would invest  77,669  in BlackRock on October 9, 2024 and sell it today you would earn a total of  23,605  from holding BlackRock or generate 30.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.06%
Values	Daily Returns

BlackRock  vs.  JAN Old

BlackRock

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JAN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JAN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, JAN Old is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BlackRock and JAN Old

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

The idea behind BlackRock and JAN Old 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.