Correlation Between BlackRock Science and PIMCO 25

Can any of the company-specific risk be diversified away by investing in both BlackRock Science and PIMCO 25 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 PIMCO 25 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 PIMCO 25 Year, you can compare the effects of market volatilities on BlackRock Science and PIMCO 25 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 PIMCO 25. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Science and PIMCO 25.

Diversification Opportunities for BlackRock Science and PIMCO 25

-0.89

Correlation Coefficient

BlackRock Science  PIMCO 25

Pay attention - limited upside

The 3 months correlation between BlackRock and PIMCO is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Science Tech and PIMCO 25 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 25 Year 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 PIMCO 25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO 25 Year has no effect on the direction of BlackRock Science i.e., BlackRock Science and PIMCO 25 go up and down completely randomly.

Pair Corralation between BlackRock Science and PIMCO 25

Considering the 90-day investment horizon BlackRock Science Tech is expected to generate 0.62 times more return on investment than PIMCO 25. However, BlackRock Science Tech is 1.62 times less risky than PIMCO 25. It trades about 0.18 of its potential returns per unit of risk. PIMCO 25 Year is currently generating about -0.05 per unit of risk. If you would invest  3,356  in BlackRock Science Tech on September 2, 2024 and sell it today you would earn a total of  345.00  from holding BlackRock Science Tech or generate 10.28% return on investment over 90 days.

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

BlackRock Science Tech  vs.  PIMCO 25 Year

BlackRock Science Tech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Science Tech are ranked lower than 13 (%) 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 January 2025.

PIMCO 25 Year

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO 25 Year has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, PIMCO 25 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Science and PIMCO 25

The main advantage of trading using opposite BlackRock Science and PIMCO 25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Science position performs unexpectedly, PIMCO 25 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 PIMCO 25 will offset losses from the drop in PIMCO 25's long position.

The idea behind BlackRock Science Tech and PIMCO 25 Year 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.