Correlation Between Strats Trust and BlackRock MIT

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

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

Diversification Opportunities for Strats Trust and BlackRock MIT

-0.02

Correlation Coefficient

Strats Trust  BlackRock MIT

Good diversification

The 3 months correlation between Strats and BlackRock is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Strats Trust Cellular 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 Strats Trust 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 Strats Trust Cellular 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 Strats Trust i.e., Strats Trust and BlackRock MIT go up and down completely randomly.

Pair Corralation between Strats Trust and BlackRock MIT

Considering the 90-day investment horizon Strats Trust Cellular is expected to generate 6.58 times more return on investment than BlackRock MIT. However, Strats Trust is 6.58 times more volatile than BlackRock MIT II. It trades about 0.03 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  766.00  in Strats Trust Cellular on October 24, 2024 and sell it today you would earn a total of  177.00  from holding Strats Trust Cellular or generate 23.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.44%
Values	Daily Returns

Strats Trust Cellular  vs.  BlackRock MIT II

Strats Trust Cellular

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strats Trust Cellular has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking indicators, Strats Trust is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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 Strats Trust and BlackRock MIT

The main advantage of trading using opposite Strats Trust and BlackRock MIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strats Trust 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 Strats Trust Cellular 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.