Correlation Between Fentura Financial and BlackRock MIT

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

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

Diversification Opportunities for Fentura Financial and BlackRock MIT

-0.06

Correlation Coefficient

Fentura Financial  BlackRock MIT

Good diversification

The 3 months correlation between Fentura and BlackRock is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fentura Financial and BlackRock MIT II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock MIT II and Fentura Financial 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 Fentura Financial are associated (or correlated) with BlackRock MIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock MIT II has no effect on the direction of Fentura Financial i.e., Fentura Financial and BlackRock MIT go up and down completely randomly.

Pair Corralation between Fentura Financial and BlackRock MIT

Given the investment horizon of 90 days Fentura Financial is expected to generate 3.43 times more return on investment than BlackRock MIT. However, Fentura Financial is 3.43 times more volatile than BlackRock MIT II. It trades about 0.09 of its potential returns per unit of risk. BlackRock MIT II is currently generating about 0.02 per unit of risk. If you would invest  2,291  in Fentura Financial on October 24, 2024 and sell it today you would earn a total of  2,059  from holding Fentura Financial or generate 89.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.36%
Values	Daily Returns

Fentura Financial  vs.  BlackRock MIT II

Fentura Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fentura Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fentura Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

BlackRock MIT II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock MIT II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, BlackRock MIT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fentura Financial and BlackRock MIT

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

The idea behind Fentura Financial and BlackRock MIT II 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.