Correlation Between Blackrock Financial and Aqr Equity

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

Diversification Opportunities for Blackrock Financial and Aqr Equity

0.2

Correlation Coefficient

Blackrock Financial  Aqr Equity

Modest diversification

The 3 months correlation between Blackrock and Aqr is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Financial Institutio and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market 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 Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Blackrock Financial i.e., Blackrock Financial and Aqr Equity go up and down completely randomly.

Pair Corralation between Blackrock Financial and Aqr Equity

If you would invest  1,003  in Aqr Equity Market on September 1, 2024 and sell it today you would earn a total of  32.00  from holding Aqr Equity Market or generate 3.19% 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.  Aqr Equity Market

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.

Aqr Equity Market

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Equity Market are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Equity 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 Aqr Equity

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

The idea behind Blackrock Financial Institutions and Aqr Equity Market 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..