Correlation Between Blackrock Financial and Transamerica Large

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

Diversification Opportunities for Blackrock Financial and Transamerica Large

0.0

Correlation Coefficient

Blackrock Financial  Transamerica Large

Pay attention - limited upside

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

Pair Corralation between Blackrock Financial and Transamerica Large

Assuming the 90 days horizon Blackrock Financial is expected to generate 29.6 times less return on investment than Transamerica Large. But when comparing it to its historical volatility, Blackrock Financial Institutions is 2.76 times less risky than Transamerica Large. It trades about 0.0 of its potential returns per unit of risk. Transamerica Large Core is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Transamerica Large Core on October 7, 2024 and sell it today you would earn a total of  83.00  from holding Transamerica Large Core or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	72.76%
Values	Daily Returns

Blackrock Financial Institutio  vs.  Transamerica Large Core

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.

Transamerica Large Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transamerica Large Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Blackrock Financial and Transamerica Large

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

The idea behind Blackrock Financial Institutions and Transamerica Large Core 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.