Correlation Between Blackrock Floating and Allianzgi Equity

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

By analyzing existing cross correlation between Blackrock Floating Rate and Allianzgi Equity Convertible, you can compare the effects of market volatilities on Blackrock Floating and Allianzgi Equity 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 Floating with a short position of Allianzgi Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Floating and Allianzgi Equity.

Diversification Opportunities for Blackrock Floating and Allianzgi Equity

0.87

Correlation Coefficient

Blackrock Floating  Allianzgi Equity

Very poor diversification

The 3 months correlation between Blackrock and Allianzgi is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Floating Rate and Allianzgi Equity Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Equity Con and Blackrock Floating 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 Floating Rate are associated (or correlated) with Allianzgi Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Equity Con has no effect on the direction of Blackrock Floating i.e., Blackrock Floating and Allianzgi Equity go up and down completely randomly.

Pair Corralation between Blackrock Floating and Allianzgi Equity

Considering the 90-day investment horizon Blackrock Floating Rate is expected to generate 0.82 times more return on investment than Allianzgi Equity. However, Blackrock Floating Rate is 1.22 times less risky than Allianzgi Equity. It trades about 0.29 of its potential returns per unit of risk. Allianzgi Equity Convertible is currently generating about 0.22 per unit of risk. If you would invest  1,289  in Blackrock Floating Rate on September 13, 2024 and sell it today you would earn a total of  146.00  from holding Blackrock Floating Rate or generate 11.33% return on investment over 90 days.

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

Blackrock Floating Rate  vs.  Allianzgi Equity Convertible

Blackrock Floating Rate

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Floating Rate are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat uncertain basic indicators, Blackrock Floating may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Allianzgi Equity Con

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Equity Convertible are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather inconsistent forward indicators, Allianzgi Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Blackrock Floating and Allianzgi Equity

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

The idea behind Blackrock Floating Rate and Allianzgi Equity Convertible 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.