Correlation Between BlackRock Science and Nuveen NASDAQ

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

By analyzing existing cross correlation between BlackRock Science and and Nuveen NASDAQ 100, you can compare the effects of market volatilities on BlackRock Science and Nuveen NASDAQ 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 Nuveen NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Science and Nuveen NASDAQ.

Diversification Opportunities for BlackRock Science and Nuveen NASDAQ

0.95

Correlation Coefficient

BlackRock Science  Nuveen NASDAQ

Almost no diversification

The 3 months correlation between BlackRock and Nuveen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Science and and Nuveen NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen NASDAQ 100 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 and are associated (or correlated) with Nuveen NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen NASDAQ 100 has no effect on the direction of BlackRock Science i.e., BlackRock Science and Nuveen NASDAQ go up and down completely randomly.

Pair Corralation between BlackRock Science and Nuveen NASDAQ

Given the investment horizon of 90 days BlackRock Science and is expected to under-perform the Nuveen NASDAQ. In addition to that, BlackRock Science is 1.44 times more volatile than Nuveen NASDAQ 100. It trades about -0.11 of its total potential returns per unit of risk. Nuveen NASDAQ 100 is currently generating about -0.15 per unit of volatility. If you would invest  2,650  in Nuveen NASDAQ 100 on December 29, 2024 and sell it today you would lose (279.00) from holding Nuveen NASDAQ 100 or give up 10.53% of portfolio value over 90 days.

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

BlackRock Science and  vs.  Nuveen NASDAQ 100

BlackRock Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Science and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nuveen NASDAQ 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen NASDAQ 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with BlackRock Science and Nuveen NASDAQ

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

The idea behind BlackRock Science and and Nuveen NASDAQ 100 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.