Correlation Between BlackRock Science and IQ Candriam

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

By analyzing existing cross correlation between BlackRock Science Tech and IQ Candriam ESG, you can compare the effects of market volatilities on BlackRock Science and IQ Candriam 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 Science with a short position of IQ Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Science and IQ Candriam.

Diversification Opportunities for BlackRock Science and IQ Candriam

-0.4

Correlation Coefficient

BlackRock Science  IQ Candriam

Very good diversification

The 3 months correlation between BlackRock and IQSI is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Science Tech and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG and BlackRock Science 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 Science Tech are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of BlackRock Science i.e., BlackRock Science and IQ Candriam go up and down completely randomly.

Pair Corralation between BlackRock Science and IQ Candriam

Considering the 90-day investment horizon BlackRock Science Tech is expected to generate 1.76 times more return on investment than IQ Candriam. However, BlackRock Science is 1.76 times more volatile than IQ Candriam ESG. It trades about -0.05 of its potential returns per unit of risk. IQ Candriam ESG is currently generating about -0.34 per unit of risk. If you would invest  3,779  in BlackRock Science Tech on October 7, 2024 and sell it today you would lose (46.00) from holding BlackRock Science Tech or give up 1.22% of portfolio value over 90 days.

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

BlackRock Science Tech  vs.  IQ Candriam ESG

BlackRock Science Tech

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Science Tech are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BlackRock Science may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IQ Candriam ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQ Candriam ESG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with BlackRock Science and IQ Candriam

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

The idea behind BlackRock Science Tech and IQ Candriam ESG 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.