Correlation Between Crawford Multi and Blackrock Mid

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

By analyzing existing cross correlation between Crawford Multi Asset Income and Blackrock Mid Cap, you can compare the effects of market volatilities on Crawford Multi and Blackrock Mid 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 Crawford Multi with a short position of Blackrock Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crawford Multi and Blackrock Mid.

Diversification Opportunities for Crawford Multi and Blackrock Mid

0.14

Correlation Coefficient

Crawford Multi  Blackrock Mid

Average diversification

The 3 months correlation between Crawford and Blackrock is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Multi Asset Income and Blackrock Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Mid Cap and Crawford Multi 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 Crawford Multi Asset Income are associated (or correlated) with Blackrock Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Mid Cap has no effect on the direction of Crawford Multi i.e., Crawford Multi and Blackrock Mid go up and down completely randomly.

Pair Corralation between Crawford Multi and Blackrock Mid

Assuming the 90 days horizon Crawford Multi Asset Income is expected to under-perform the Blackrock Mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Crawford Multi Asset Income is 3.0 times less risky than Blackrock Mid. The mutual fund trades about -0.41 of its potential returns per unit of risk. The Blackrock Mid Cap is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  4,601  in Blackrock Mid Cap on September 23, 2024 and sell it today you would lose (150.00) from holding Blackrock Mid Cap or give up 3.26% of portfolio value over 90 days.

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

Crawford Multi Asset Income  vs.  Blackrock Mid Cap

Crawford Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Crawford Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Mid Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Blackrock Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Crawford Multi and Blackrock Mid

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

The idea behind Crawford Multi Asset Income and Blackrock Mid Cap 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.