Correlation Between Blackrock Strategic and Bts Tactical

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

By analyzing existing cross correlation between Blackrock Strategic Income and Bts Tactical Fixed, you can compare the effects of market volatilities on Blackrock Strategic and Bts Tactical 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 Strategic with a short position of Bts Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Strategic and Bts Tactical.

Diversification Opportunities for Blackrock Strategic and Bts Tactical

0.72

Correlation Coefficient

Blackrock Strategic  Bts Tactical

Poor diversification

The 3 months correlation between Blackrock and Bts is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Strategic Income and Bts Tactical Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Tactical Fixed and Blackrock Strategic 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 Strategic Income are associated (or correlated) with Bts Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Tactical Fixed has no effect on the direction of Blackrock Strategic i.e., Blackrock Strategic and Bts Tactical go up and down completely randomly.

Pair Corralation between Blackrock Strategic and Bts Tactical

Assuming the 90 days horizon Blackrock Strategic Income is expected to generate 0.25 times more return on investment than Bts Tactical. However, Blackrock Strategic Income is 3.97 times less risky than Bts Tactical. It trades about -0.4 of its potential returns per unit of risk. Bts Tactical Fixed is currently generating about -0.22 per unit of risk. If you would invest  957.00  in Blackrock Strategic Income on October 7, 2024 and sell it today you would lose (10.00) from holding Blackrock Strategic Income or give up 1.04% of portfolio value over 90 days.

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

Blackrock Strategic Income  vs.  Bts Tactical Fixed

Blackrock Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Strategic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bts Tactical Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bts Tactical Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Bts Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Strategic and Bts Tactical

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

The idea behind Blackrock Strategic Income and Bts Tactical Fixed 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.