Correlation Between BlackRock Frontiers and AcadeMedia

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

By analyzing existing cross correlation between BlackRock Frontiers Investment and AcadeMedia AB, you can compare the effects of market volatilities on BlackRock Frontiers and AcadeMedia 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 Frontiers with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Frontiers and AcadeMedia.

Diversification Opportunities for BlackRock Frontiers and AcadeMedia

0.67

Correlation Coefficient

BlackRock Frontiers  AcadeMedia

Poor diversification

The 3 months correlation between BlackRock and AcadeMedia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and BlackRock Frontiers 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 Frontiers Investment are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of BlackRock Frontiers i.e., BlackRock Frontiers and AcadeMedia go up and down completely randomly.

Pair Corralation between BlackRock Frontiers and AcadeMedia

Assuming the 90 days trading horizon BlackRock Frontiers is expected to generate 12.54 times less return on investment than AcadeMedia. But when comparing it to its historical volatility, BlackRock Frontiers Investment is 1.4 times less risky than AcadeMedia. It trades about 0.02 of its potential returns per unit of risk. AcadeMedia AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,550  in AcadeMedia AB on December 13, 2024 and sell it today you would earn a total of  1,190  from holding AcadeMedia AB or generate 18.17% return on investment over 90 days.

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

BlackRock Frontiers Investment  vs.  AcadeMedia AB

BlackRock Frontiers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Frontiers Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock Frontiers is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AcadeMedia AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AcadeMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Frontiers and AcadeMedia

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

The idea behind BlackRock Frontiers Investment and AcadeMedia AB 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.