Correlation Between Multimedia Portfolio and Blackrock Advantage

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

By analyzing existing cross correlation between Multimedia Portfolio Multimedia and Blackrock Advantage Large, you can compare the effects of market volatilities on Multimedia Portfolio and Blackrock Advantage 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 Multimedia Portfolio with a short position of Blackrock Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimedia Portfolio and Blackrock Advantage.

Diversification Opportunities for Multimedia Portfolio and Blackrock Advantage

-0.11

Correlation Coefficient

Multimedia Portfolio  Blackrock Advantage

Good diversification

The 3 months correlation between Multimedia and Blackrock is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Multimedia Portfolio Multimedi and Blackrock Advantage Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Advantage Large and Multimedia Portfolio 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 Multimedia Portfolio Multimedia are associated (or correlated) with Blackrock Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Advantage Large has no effect on the direction of Multimedia Portfolio i.e., Multimedia Portfolio and Blackrock Advantage go up and down completely randomly.

Pair Corralation between Multimedia Portfolio and Blackrock Advantage

Assuming the 90 days horizon Multimedia Portfolio Multimedia is expected to generate 0.71 times more return on investment than Blackrock Advantage. However, Multimedia Portfolio Multimedia is 1.42 times less risky than Blackrock Advantage. It trades about 0.01 of its potential returns per unit of risk. Blackrock Advantage Large is currently generating about -0.13 per unit of risk. If you would invest  11,540  in Multimedia Portfolio Multimedia on December 3, 2024 and sell it today you would earn a total of  57.00  from holding Multimedia Portfolio Multimedia or generate 0.49% return on investment over 90 days.

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

Multimedia Portfolio Multimedi  vs.  Blackrock Advantage Large

Multimedia Portfolio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multimedia Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Advantage Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Advantage Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Multimedia Portfolio and Blackrock Advantage

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

The idea behind Multimedia Portfolio Multimedia and Blackrock Advantage Large 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.