Correlation Between Blkrc Sgy and Managed Account

Can any of the company-specific risk be diversified away by investing in both Blkrc Sgy and Managed Account 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 Blkrc Sgy and Managed Account into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blkrc Sgy Mnp and Managed Account Series, you can compare the effects of market volatilities on Blkrc Sgy and Managed Account 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 Blkrc Sgy with a short position of Managed Account. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blkrc Sgy and Managed Account.

Diversification Opportunities for Blkrc Sgy and Managed Account

0.9

Correlation Coefficient

Blkrc Sgy  Managed Account

Almost no diversification

The 3 months correlation between Blkrc and Managed is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Blkrc Sgy Mnp and Managed Account Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Account Series and Blkrc Sgy 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 Blkrc Sgy Mnp are associated (or correlated) with Managed Account. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Account Series has no effect on the direction of Blkrc Sgy i.e., Blkrc Sgy and Managed Account go up and down completely randomly.

Pair Corralation between Blkrc Sgy and Managed Account

Assuming the 90 days horizon Blkrc Sgy Mnp is expected to under-perform the Managed Account. In addition to that, Blkrc Sgy is 1.42 times more volatile than Managed Account Series. It trades about -0.36 of its total potential returns per unit of risk. Managed Account Series is currently generating about -0.43 per unit of volatility. If you would invest  901.00  in Managed Account Series on October 9, 2024 and sell it today you would lose (15.00) from holding Managed Account Series or give up 1.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.0%
Values	Daily Returns

Blkrc Sgy Mnp  vs.  Managed Account Series

Blkrc Sgy Mnp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blkrc Sgy Mnp has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blkrc Sgy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Managed Account Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Managed Account Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Managed Account is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blkrc Sgy and Managed Account

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

The idea behind Blkrc Sgy Mnp and Managed Account Series 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.