Correlation Between Bats Series and Blackrock Low

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

By analyzing existing cross correlation between Bats Series M and Blackrock Low Duration, you can compare the effects of market volatilities on Bats Series and Blackrock Low 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 Bats Series with a short position of Blackrock Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bats Series and Blackrock Low.

Diversification Opportunities for Bats Series and Blackrock Low

0.96

Correlation Coefficient

Bats Series  Blackrock Low

Almost no diversification

The 3 months correlation between Bats and Blackrock is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bats Series M and Blackrock Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Low Duration and Bats Series 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 Bats Series M are associated (or correlated) with Blackrock Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Low Duration has no effect on the direction of Bats Series i.e., Bats Series and Blackrock Low go up and down completely randomly.

Pair Corralation between Bats Series and Blackrock Low

Assuming the 90 days horizon Bats Series M is expected to generate 3.02 times more return on investment than Blackrock Low. However, Bats Series is 3.02 times more volatile than Blackrock Low Duration. It trades about 0.14 of its potential returns per unit of risk. Blackrock Low Duration is currently generating about 0.19 per unit of risk. If you would invest  815.00  in Bats Series M on December 29, 2024 and sell it today you would earn a total of  23.00  from holding Bats Series M or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Bats Series M  vs.  Blackrock Low Duration

Bats Series M

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bats Series M are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Bats Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Low Duration

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Low Duration are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Blackrock Low is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bats Series and Blackrock Low

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

The idea behind Bats Series M and Blackrock Low Duration 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.