Correlation Between Blackrock Financial and Mainstay Nerstone

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

By analyzing existing cross correlation between Blackrock Financial Institutions and Mainstay Nerstone Growth, you can compare the effects of market volatilities on Blackrock Financial and Mainstay Nerstone 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 Financial with a short position of Mainstay Nerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Financial and Mainstay Nerstone.

Diversification Opportunities for Blackrock Financial and Mainstay Nerstone

0.25

Correlation Coefficient

Blackrock Financial  Mainstay Nerstone

Modest diversification

The 3 months correlation between Blackrock and Mainstay is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Financial Institutio and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Blackrock Financial 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 Financial Institutions are associated (or correlated) with Mainstay Nerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Blackrock Financial i.e., Blackrock Financial and Mainstay Nerstone go up and down completely randomly.

Pair Corralation between Blackrock Financial and Mainstay Nerstone

If you would invest  4,605  in Mainstay Nerstone Growth on August 31, 2024 and sell it today you would earn a total of  420.00  from holding Mainstay Nerstone Growth or generate 9.12% return on investment over 90 days.

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

Blackrock Financial Institutio  vs.  Mainstay Nerstone Growth

Blackrock Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Nerstone Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Nerstone Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mainstay Nerstone may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Blackrock Financial and Mainstay Nerstone

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

The idea behind Blackrock Financial Institutions and Mainstay Nerstone Growth 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.