Correlation Between Blackrock Financial and Catalystmillburn

Can any of the company-specific risk be diversified away by investing in both Blackrock Financial and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Blackrock Financial and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Financial and Catalystmillburn.

Diversification Opportunities for Blackrock Financial and Catalystmillburn

0.0

Correlation Coefficient

Blackrock Financial  Catalystmillburn

Pay attention - limited upside

The 3 months correlation between Blackrock and Catalystmillburn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Financial Institutio and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Blackrock Financial i.e., Blackrock Financial and Catalystmillburn go up and down completely randomly.

Pair Corralation between Blackrock Financial and Catalystmillburn

Assuming the 90 days horizon Blackrock Financial is expected to generate 1.88 times less return on investment than Catalystmillburn. But when comparing it to its historical volatility, Blackrock Financial Institutions is 4.63 times less risky than Catalystmillburn. It trades about 0.1 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,501  in Catalystmillburn Hedge Strategy on September 24, 2024 and sell it today you would earn a total of  252.00  from holding Catalystmillburn Hedge Strategy or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.64%
Values	Daily Returns

Blackrock Financial Institutio  vs.  Catalystmillburn Hedge Strateg

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.

Catalystmillburn Hedge

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalystmillburn 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 Financial and Catalystmillburn

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

The idea behind Blackrock Financial Institutions and Catalystmillburn Hedge Strategy 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.