Correlation Between Integral Acquisition and BlackRock Investment

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

By analyzing existing cross correlation between Integral Acquisition 1 and BlackRock Investment Quality, you can compare the effects of market volatilities on Integral Acquisition and BlackRock Investment 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 Integral Acquisition with a short position of BlackRock Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral Acquisition and BlackRock Investment.

Diversification Opportunities for Integral Acquisition and BlackRock Investment

-0.49

Correlation Coefficient

Integral Acquisition  BlackRock Investment

Very good diversification

The 3 months correlation between Integral and BlackRock is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Integral Acquisition 1 and BlackRock Investment Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Investment and Integral Acquisition 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 Integral Acquisition 1 are associated (or correlated) with BlackRock Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Investment has no effect on the direction of Integral Acquisition i.e., Integral Acquisition and BlackRock Investment go up and down completely randomly.

Pair Corralation between Integral Acquisition and BlackRock Investment

Given the investment horizon of 90 days Integral Acquisition is expected to generate 1.58 times less return on investment than BlackRock Investment. But when comparing it to its historical volatility, Integral Acquisition 1 is 2.31 times less risky than BlackRock Investment. It trades about 0.02 of its potential returns per unit of risk. BlackRock Investment Quality is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,087  in BlackRock Investment Quality on October 4, 2024 and sell it today you would earn a total of  39.00  from holding BlackRock Investment Quality or generate 3.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.64%
Values	Daily Returns

Integral Acquisition 1  vs.  BlackRock Investment Quality

Integral Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Acquisition 1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

BlackRock Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Investment Quality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Integral Acquisition and BlackRock Investment

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

The idea behind Integral Acquisition 1 and BlackRock Investment Quality 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.