Correlation Between BlackRock Health and Blackrock International

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

Diversification Opportunities for BlackRock Health and Blackrock International

0.45

Correlation Coefficient

BlackRock Health  Blackrock International

Very weak diversification

The 3 months correlation between BlackRock and Blackrock is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Health Sciences and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of BlackRock Health i.e., BlackRock Health and Blackrock International go up and down completely randomly.

Pair Corralation between BlackRock Health and Blackrock International

Considering the 90-day investment horizon BlackRock Health Sciences is expected to under-perform the Blackrock International. But the etf apears to be less risky and, when comparing its historical volatility, BlackRock Health Sciences is 1.51 times less risky than Blackrock International. The etf trades about -0.09 of its potential returns per unit of risk. The Blackrock International Growth is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  565.00  in Blackrock International Growth on September 2, 2024 and sell it today you would lose (8.00) from holding Blackrock International Growth or give up 1.42% of portfolio value over 90 days.

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

BlackRock Health Sciences  vs.  Blackrock International Growth

BlackRock Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, BlackRock Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Blackrock International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Blackrock International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Health and Blackrock International

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

The idea behind BlackRock Health Sciences and Blackrock International Growth 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.