Correlation Between Blackrock Focus and Growth Fund

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

By analyzing existing cross correlation between Blackrock Focus Growth and Growth Fund Of, you can compare the effects of market volatilities on Blackrock Focus and Growth Fund 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 Focus with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Focus and Growth Fund.

Diversification Opportunities for Blackrock Focus and Growth Fund

0.45

Correlation Coefficient

Blackrock Focus  Growth Fund

Very weak diversification

The 3 months correlation between Blackrock and Growth is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Focus Growth and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Blackrock Focus 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 Focus Growth are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Blackrock Focus i.e., Blackrock Focus and Growth Fund go up and down completely randomly.

Pair Corralation between Blackrock Focus and Growth Fund

Assuming the 90 days horizon Blackrock Focus Growth is expected to generate 0.42 times more return on investment than Growth Fund. However, Blackrock Focus Growth is 2.39 times less risky than Growth Fund. It trades about 0.0 of its potential returns per unit of risk. Growth Fund Of is currently generating about -0.16 per unit of risk. If you would invest  801.00  in Blackrock Focus Growth on October 9, 2024 and sell it today you would lose (1.00) from holding Blackrock Focus Growth or give up 0.12% of portfolio value over 90 days.

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

Blackrock Focus Growth  vs.  Growth Fund Of

Blackrock Focus Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Focus Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Focus may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Growth Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growth Fund Of has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Growth Fund 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 Focus and Growth Fund

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

The idea behind Blackrock Focus Growth and Growth Fund Of 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.