Correlation Between Blackrock Enhanced and INSI

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

By analyzing existing cross correlation between Blackrock Enhanced Government and INSI, you can compare the effects of market volatilities on Blackrock Enhanced and INSI 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 INSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and INSI.

Diversification Opportunities for Blackrock Enhanced and INSI

0.29

Correlation Coefficient

Blackrock Enhanced  INSI

Modest diversification

The 3 months correlation between Blackrock and INSI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Government and INSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSI 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 Government are associated (or correlated) with INSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSI has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and INSI go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and INSI

Considering the 90-day investment horizon Blackrock Enhanced is expected to generate 2733.88 times less return on investment than INSI. But when comparing it to its historical volatility, Blackrock Enhanced Government is 162.56 times less risky than INSI. It trades about 0.01 of its potential returns per unit of risk. INSI is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  13.00  in INSI on December 29, 2024 and sell it today you would earn a total of  1,610  from holding INSI or generate 12384.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	34.48%
Values	Daily Returns

Blackrock Enhanced Government  vs.  INSI

Blackrock Enhanced

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Government are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Blackrock Enhanced is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

INSI

Risk-Adjusted Performance

Solid

Over the last 90 days INSI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly fragile basic indicators, INSI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Enhanced and INSI

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

The idea behind Blackrock Enhanced Government and INSI 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.