Correlation Between Inflation Protected and Blackrock Glbl

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

By analyzing existing cross correlation between Inflation Protected Bond Fund and Blackrock Glbl Opprtnts, you can compare the effects of market volatilities on Inflation Protected and Blackrock Glbl 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 Inflation Protected with a short position of Blackrock Glbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Protected and Blackrock Glbl.

Diversification Opportunities for Inflation Protected and Blackrock Glbl

0.49

Correlation Coefficient

Inflation Protected  Blackrock Glbl

Very weak diversification

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

Pair Corralation between Inflation Protected and Blackrock Glbl

Assuming the 90 days horizon Inflation Protected Bond Fund is expected to under-perform the Blackrock Glbl. But the mutual fund apears to be less risky and, when comparing its historical volatility, Inflation Protected Bond Fund is 2.07 times less risky than Blackrock Glbl. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Blackrock Glbl Opprtnts is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,874  in Blackrock Glbl Opprtnts on December 27, 2024 and sell it today you would earn a total of  195.00  from holding Blackrock Glbl Opprtnts or generate 10.41% return on investment over 90 days.

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

Inflation Protected Bond Fund  vs.  Blackrock Glbl Opprtnts

Inflation Protected

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inflation Protected Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Inflation Protected is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Glbl Opprtnts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Glbl Opprtnts are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Blackrock Glbl may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Inflation Protected and Blackrock Glbl

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

The idea behind Inflation Protected Bond Fund and Blackrock Glbl Opprtnts 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.