Correlation Between Bankers Investment and Blackrock World

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

By analyzing existing cross correlation between Bankers Investment Trust and Blackrock World Mining, you can compare the effects of market volatilities on Bankers Investment and Blackrock World 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 Bankers Investment with a short position of Blackrock World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Blackrock World.

Diversification Opportunities for Bankers Investment and Blackrock World

-0.65

Correlation Coefficient

Bankers Investment  Blackrock World

Excellent diversification

The 3 months correlation between Bankers and Blackrock is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Blackrock World Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock World Mining and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Blackrock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock World Mining has no effect on the direction of Bankers Investment i.e., Bankers Investment and Blackrock World go up and down completely randomly.

Pair Corralation between Bankers Investment and Blackrock World

Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.53 times more return on investment than Blackrock World. However, Bankers Investment Trust is 1.88 times less risky than Blackrock World. It trades about 0.04 of its potential returns per unit of risk. Blackrock World Mining is currently generating about -0.05 per unit of risk. If you would invest  10,133  in Bankers Investment Trust on October 11, 2024 and sell it today you would earn a total of  1,487  from holding Bankers Investment Trust or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Bankers Investment Trust  vs.  Blackrock World Mining

Bankers Investment Trust

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bankers Investment Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bankers Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Blackrock World Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock World Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bankers Investment and Blackrock World

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

The idea behind Bankers Investment Trust and Blackrock World Mining 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 Global Correlations module to find global opportunities by holding instruments from different markets.