Correlation Between Blackrock Glbl and Mai Managed

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

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

Diversification Opportunities for Blackrock Glbl and Mai Managed

-0.4

Correlation Coefficient

Blackrock Glbl  Mai Managed

Very good diversification

The 3 months correlation between Blackrock and Mai is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Glbl Sm and Mai Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mai Managed Volatility and Blackrock Glbl 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 Glbl Sm are associated (or correlated) with Mai Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mai Managed Volatility has no effect on the direction of Blackrock Glbl i.e., Blackrock Glbl and Mai Managed go up and down completely randomly.

Pair Corralation between Blackrock Glbl and Mai Managed

Assuming the 90 days horizon Blackrock Glbl Sm is expected to generate 3.5 times more return on investment than Mai Managed. However, Blackrock Glbl is 3.5 times more volatile than Mai Managed Volatility. It trades about 0.05 of its potential returns per unit of risk. Mai Managed Volatility is currently generating about 0.11 per unit of risk. If you would invest  2,134  in Blackrock Glbl Sm on October 11, 2024 and sell it today you would earn a total of  537.00  from holding Blackrock Glbl Sm or generate 25.16% return on investment over 90 days.

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

Blackrock Glbl Sm  vs.  Mai Managed Volatility

Blackrock Glbl Sm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Glbl Sm has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mai Managed Volatility

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mai Managed Volatility are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mai Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Glbl and Mai Managed

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

The idea behind Blackrock Glbl Sm and Mai Managed Volatility 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.