Correlation Between Blackrock Mid and Amg Timessquare

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

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

Diversification Opportunities for Blackrock Mid and Amg Timessquare

0.81

Correlation Coefficient

Blackrock Mid  Amg Timessquare

Very poor diversification

The 3 months correlation between Blackrock and Amg is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Mid Cap and Amg Timessquare Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Timessquare Emerging and Blackrock Mid 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 Mid Cap are associated (or correlated) with Amg Timessquare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Timessquare Emerging has no effect on the direction of Blackrock Mid i.e., Blackrock Mid and Amg Timessquare go up and down completely randomly.

Pair Corralation between Blackrock Mid and Amg Timessquare

Assuming the 90 days horizon Blackrock Mid Cap is expected to generate 0.85 times more return on investment than Amg Timessquare. However, Blackrock Mid Cap is 1.18 times less risky than Amg Timessquare. It trades about 0.09 of its potential returns per unit of risk. Amg Timessquare Emerging is currently generating about -0.07 per unit of risk. If you would invest  3,881  in Blackrock Mid Cap on September 29, 2024 and sell it today you would earn a total of  541.00  from holding Blackrock Mid Cap or generate 13.94% return on investment over 90 days.

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

Blackrock Mid Cap  vs.  Amg Timessquare Emerging

Blackrock Mid Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Mid Cap are ranked lower than 6 (%) 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.

Amg Timessquare Emerging

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Timessquare Emerging are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amg Timessquare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Mid and Amg Timessquare

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

The idea behind Blackrock Mid Cap and Amg Timessquare Emerging 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.

Check out your portfolio center.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.