Correlation Between BlackRock Health and Virtus Allianzgi

Can any of the company-specific risk be diversified away by investing in both BlackRock Health 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 Health 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 Health Sciences and Virtus Allianzgi Artificial, you can compare the effects of market volatilities on BlackRock Health 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 Health with a short position of Virtus Allianzgi. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Health and Virtus Allianzgi.

Diversification Opportunities for BlackRock Health and Virtus Allianzgi

0.55

Correlation Coefficient

BlackRock Health  Virtus Allianzgi

Very weak diversification

The 3 months correlation between BlackRock and Virtus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Health Sciences and Virtus Allianzgi Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Allianzgi Art and BlackRock Health 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 Health Sciences 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 Art has no effect on the direction of BlackRock Health i.e., BlackRock Health and Virtus Allianzgi go up and down completely randomly.

Pair Corralation between BlackRock Health and Virtus Allianzgi

Considering the 90-day investment horizon BlackRock Health Sciences is expected to generate 0.48 times more return on investment than Virtus Allianzgi. However, BlackRock Health Sciences is 2.08 times less risky than Virtus Allianzgi. It trades about 0.06 of its potential returns per unit of risk. Virtus Allianzgi Artificial is currently generating about 0.01 per unit of risk. If you would invest  3,912  in BlackRock Health Sciences on November 29, 2024 and sell it today you would earn a total of  98.00  from holding BlackRock Health Sciences or generate 2.51% return on investment over 90 days.

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

BlackRock Health Sciences  vs.  Virtus Allianzgi Artificial

BlackRock Health Sciences

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Health Sciences are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, BlackRock Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Virtus Allianzgi Art

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Allianzgi Artificial has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy forward indicators, Virtus Allianzgi 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 Health and Virtus Allianzgi

The main advantage of trading using opposite BlackRock Health and Virtus Allianzgi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Health 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 Health Sciences and Virtus Allianzgi Artificial 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.