Correlation Between Cornerstone Strategic and BlackRock

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

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

Diversification Opportunities for Cornerstone Strategic and BlackRock

0.89

Correlation Coefficient

Cornerstone Strategic  BlackRock

Very poor diversification

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

Pair Corralation between Cornerstone Strategic and BlackRock

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 0.67 times more return on investment than BlackRock. However, Cornerstone Strategic Value is 1.5 times less risky than BlackRock. It trades about 0.53 of its potential returns per unit of risk. BlackRock is currently generating about 0.27 per unit of risk. If you would invest  722.00  in Cornerstone Strategic Value on September 9, 2024 and sell it today you would earn a total of  196.00  from holding Cornerstone Strategic Value or generate 27.15% return on investment over 90 days.

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

Cornerstone Strategic Value  vs.  BlackRock

Cornerstone Strategic

Risk-Adjusted Performance

42 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 42 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

BlackRock

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cornerstone Strategic and BlackRock

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

The idea behind Cornerstone Strategic Value and BlackRock 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..