Correlation Between BlackRock Latin and Edinburgh Worldwide

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

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

Diversification Opportunities for BlackRock Latin and Edinburgh Worldwide

-0.38

Correlation Coefficient

BlackRock Latin  Edinburgh Worldwide

Very good diversification

The 3 months correlation between BlackRock and Edinburgh is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Latin American and Edinburgh Worldwide Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Worldwide and BlackRock Latin 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 Latin American are associated (or correlated) with Edinburgh Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Worldwide has no effect on the direction of BlackRock Latin i.e., BlackRock Latin and Edinburgh Worldwide go up and down completely randomly.

Pair Corralation between BlackRock Latin and Edinburgh Worldwide

Assuming the 90 days trading horizon BlackRock Latin American is expected to generate 1.02 times more return on investment than Edinburgh Worldwide. However, BlackRock Latin is 1.02 times more volatile than Edinburgh Worldwide Investment. It trades about 0.13 of its potential returns per unit of risk. Edinburgh Worldwide Investment is currently generating about -0.16 per unit of risk. If you would invest  27,372  in BlackRock Latin American on December 30, 2024 and sell it today you would earn a total of  3,478  from holding BlackRock Latin American or generate 12.71% return on investment over 90 days.

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

BlackRock Latin American  vs.  Edinburgh Worldwide Investment

BlackRock Latin American

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Latin American are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, BlackRock Latin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Edinburgh Worldwide

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edinburgh Worldwide Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with BlackRock Latin and Edinburgh Worldwide

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

The idea behind BlackRock Latin American and Edinburgh Worldwide Investment 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.