Correlation Between BlackRock and Virtus AllianzGI

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

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

Diversification Opportunities for BlackRock and Virtus AllianzGI

-0.77

Correlation Coefficient

BlackRock  Virtus AllianzGI

Pay attention - limited upside

The 3 months correlation between BlackRock and Virtus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con 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 Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of BlackRock i.e., BlackRock and Virtus AllianzGI go up and down completely randomly.

Pair Corralation between BlackRock and Virtus AllianzGI

Considering the 90-day investment horizon BlackRock is expected to under-perform the Virtus AllianzGI. In addition to that, BlackRock is 1.22 times more volatile than Virtus AllianzGI Convertible. It trades about -0.1 of its total potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about -0.11 per unit of volatility. If you would invest  2,173  in Virtus AllianzGI Convertible on October 6, 2024 and sell it today you would lose (44.00) from holding Virtus AllianzGI Convertible or give up 2.02% of portfolio value over 90 days.

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

BlackRock  vs.  Virtus AllianzGI Convertible

BlackRock

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 10 (%) 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.

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BlackRock and Virtus AllianzGI

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

The idea behind BlackRock and Virtus AllianzGI Convertible 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.