Correlation Between BlackRock Frontiers and Segro Plc

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

Diversification Opportunities for BlackRock Frontiers and Segro Plc

0.14

Correlation Coefficient

BlackRock Frontiers  Segro Plc

Average diversification

The 3 months correlation between BlackRock and Segro is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment and Segro Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segro Plc 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 Segro Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segro Plc has no effect on the direction of BlackRock Frontiers i.e., BlackRock Frontiers and Segro Plc go up and down completely randomly.

Pair Corralation between BlackRock Frontiers and Segro Plc

Assuming the 90 days trading horizon BlackRock Frontiers Investment is expected to under-perform the Segro Plc. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock Frontiers Investment is 1.12 times less risky than Segro Plc. The stock trades about -0.04 of its potential returns per unit of risk. The Segro Plc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  69,820  in Segro Plc on December 24, 2024 and sell it today you would lose (700.00) from holding Segro Plc or give up 1.0% of portfolio value over 90 days.

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

BlackRock Frontiers Investment  vs.  Segro Plc

BlackRock Frontiers

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Frontiers Investment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Segro Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Segro Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Segro Plc is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock Frontiers and Segro Plc

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

The idea behind BlackRock Frontiers Investment and Segro Plc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.