Correlation Between Blackrock Enhanced and Blackrock International

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

By analyzing existing cross correlation between Blackrock Enhanced Capital and Blackrock International Growth, you can compare the effects of market volatilities on Blackrock Enhanced and Blackrock International 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 Enhanced with a short position of Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Blackrock International.

Diversification Opportunities for Blackrock Enhanced and Blackrock International

-0.45

Correlation Coefficient

Blackrock Enhanced  Blackrock International

Very good diversification

The 3 months correlation between Blackrock and Blackrock is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Capital and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International and Blackrock Enhanced 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 Enhanced Capital are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Blackrock International go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and Blackrock International

Considering the 90-day investment horizon Blackrock Enhanced Capital is expected to under-perform the Blackrock International. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Enhanced Capital is 1.1 times less risky than Blackrock International. The fund trades about -0.11 of its potential returns per unit of risk. The Blackrock International Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  518.00  in Blackrock International Growth on December 30, 2024 and sell it today you would earn a total of  44.00  from holding Blackrock International Growth or generate 8.49% return on investment over 90 days.

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

Blackrock Enhanced Capital  vs.  Blackrock International Growth

Blackrock Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Enhanced Capital has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong forward indicators, Blackrock Enhanced is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Blackrock International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock International Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish technical and fundamental indicators, Blackrock International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackrock Enhanced and Blackrock International

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

The idea behind Blackrock Enhanced Capital and Blackrock International Growth 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .