Correlation Between Blackrock Bal and Fidelity Focused

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

By analyzing existing cross correlation between Blackrock Bal Cap and Fidelity Focused Stock, you can compare the effects of market volatilities on Blackrock Bal and Fidelity Focused 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 Bal with a short position of Fidelity Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Bal and Fidelity Focused.

Diversification Opportunities for Blackrock Bal and Fidelity Focused

0.52

Correlation Coefficient

Blackrock Bal  Fidelity Focused

Very weak diversification

The 3 months correlation between Blackrock and Fidelity is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Bal Cap and Fidelity Focused Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Focused Stock and Blackrock Bal 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 Bal Cap are associated (or correlated) with Fidelity Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Focused Stock has no effect on the direction of Blackrock Bal i.e., Blackrock Bal and Fidelity Focused go up and down completely randomly.

Pair Corralation between Blackrock Bal and Fidelity Focused

Assuming the 90 days horizon Blackrock Bal Cap is expected to generate 0.3 times more return on investment than Fidelity Focused. However, Blackrock Bal Cap is 3.29 times less risky than Fidelity Focused. It trades about 0.03 of its potential returns per unit of risk. Fidelity Focused Stock is currently generating about -0.11 per unit of risk. If you would invest  2,582  in Blackrock Bal Cap on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Blackrock Bal Cap or generate 0.97% return on investment over 90 days.

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

Blackrock Bal Cap  vs.  Fidelity Focused Stock

Blackrock Bal Cap

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Bal Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Bal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Focused Stock

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Blackrock Bal and Fidelity Focused

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

The idea behind Blackrock Bal Cap and Fidelity Focused Stock 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 Stocks Directory module to find actively traded stocks across global markets.