Correlation Between AdvisorShares and BlackRock ETF

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

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

Diversification Opportunities for AdvisorShares and BlackRock ETF

0.38

Correlation Coefficient

AdvisorShares  BlackRock ETF

Weak diversification

The 3 months correlation between AdvisorShares and BlackRock is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares and BlackRock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ETF Trust and AdvisorShares 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 AdvisorShares are associated (or correlated) with BlackRock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ETF Trust has no effect on the direction of AdvisorShares i.e., AdvisorShares and BlackRock ETF go up and down completely randomly.

Pair Corralation between AdvisorShares and BlackRock ETF

If you would invest  3,312  in BlackRock ETF Trust on October 26, 2024 and sell it today you would earn a total of  0.00  from holding BlackRock ETF Trust or generate 0.0% return on investment over 90 days.

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

AdvisorShares  vs.  BlackRock ETF Trust

AdvisorShares

Risk-Adjusted Performance

0 of 100

Very Weak

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

BlackRock ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, BlackRock ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AdvisorShares and BlackRock ETF

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

The idea behind AdvisorShares and BlackRock ETF Trust 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.