Correlation Between Blackrock Capital and Fisher Investments

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

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

Diversification Opportunities for Blackrock Capital and Fisher Investments

0.88

Correlation Coefficient

Blackrock Capital  Fisher Investments

Very poor diversification

The 3 months correlation between Blackrock and Fisher is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Capital Appreciation and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments and Blackrock Capital 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 Capital Appreciation are associated (or correlated) with Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Blackrock Capital i.e., Blackrock Capital and Fisher Investments go up and down completely randomly.

Pair Corralation between Blackrock Capital and Fisher Investments

Assuming the 90 days horizon Blackrock Capital is expected to generate 1.14 times less return on investment than Fisher Investments. But when comparing it to its historical volatility, Blackrock Capital Appreciation is 1.17 times less risky than Fisher Investments. It trades about 0.18 of its potential returns per unit of risk. Fisher Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,180  in Fisher Small Cap on September 5, 2024 and sell it today you would earn a total of  173.00  from holding Fisher Small Cap or generate 14.66% return on investment over 90 days.

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

Blackrock Capital Appreciation  vs.  Fisher Small Cap

Blackrock Capital

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Capital Appreciation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Blackrock Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fisher Investments

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Capital and Fisher Investments

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

The idea behind Blackrock Capital Appreciation and Fisher Small Cap 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.