Correlation Between BlackRock ETF and Valued Advisers

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

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

Diversification Opportunities for BlackRock ETF and Valued Advisers

0.88

Correlation Coefficient

BlackRock ETF  Valued Advisers

Very poor diversification

The 3 months correlation between BlackRock and Valued is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ETF Trust and Valued Advisers Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valued Advisers Trust and BlackRock ETF 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 ETF Trust are associated (or correlated) with Valued Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valued Advisers Trust has no effect on the direction of BlackRock ETF i.e., BlackRock ETF and Valued Advisers go up and down completely randomly.

Pair Corralation between BlackRock ETF and Valued Advisers

Given the investment horizon of 90 days BlackRock ETF is expected to generate 3.74 times less return on investment than Valued Advisers. But when comparing it to its historical volatility, BlackRock ETF Trust is 8.91 times less risky than Valued Advisers. It trades about 0.58 of its potential returns per unit of risk. Valued Advisers Trust is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,537  in Valued Advisers Trust on October 9, 2024 and sell it today you would earn a total of  35.00  from holding Valued Advisers Trust or generate 1.38% return on investment over 90 days.

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

BlackRock ETF Trust  vs.  Valued Advisers Trust

BlackRock ETF Trust

Risk-Adjusted Performance

60 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ETF Trust are ranked lower than 60 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, BlackRock ETF is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Valued Advisers Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valued Advisers Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Valued Advisers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock ETF and Valued Advisers

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

The idea behind BlackRock ETF Trust and Valued Advisers Trust 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.