Correlation Between Blackrock Floating and SRH Total

Can any of the company-specific risk be diversified away by investing in both Blackrock Floating and SRH Total 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 SRH Total 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 SRH Total Return, you can compare the effects of market volatilities on Blackrock Floating and SRH Total 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 SRH Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Floating and SRH Total.

Diversification Opportunities for Blackrock Floating and SRH Total

-0.55

Correlation Coefficient

Blackrock Floating  SRH Total

Excellent diversification

The 3 months correlation between Blackrock and SRH is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Floating Rate and SRH Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRH Total Return 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 SRH Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRH Total Return has no effect on the direction of Blackrock Floating i.e., Blackrock Floating and SRH Total go up and down completely randomly.

Pair Corralation between Blackrock Floating and SRH Total

Considering the 90-day investment horizon Blackrock Floating Rate is expected to under-perform the SRH Total. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Floating Rate is 1.38 times less risky than SRH Total. The fund trades about -0.15 of its potential returns per unit of risk. The SRH Total Return is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,578  in SRH Total Return on December 28, 2024 and sell it today you would earn a total of  132.00  from holding SRH Total Return or generate 8.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Blackrock Floating Rate  vs.  SRH Total Return

Blackrock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Blackrock Floating is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SRH Total Return

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SRH Total Return are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, SRH Total may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackrock Floating and SRH Total

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

The idea behind Blackrock Floating Rate and SRH Total Return 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.