Correlation Between Managed Account and Blackrock

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

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

Diversification Opportunities for Managed Account and Blackrock

0.91

Correlation Coefficient

Managed Account  Blackrock

Almost no diversification

The 3 months correlation between Managed and Blackrock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Managed Account Series and Blackrock Hi Yld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Hi Yld and Managed Account 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 Managed Account Series are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Hi Yld has no effect on the direction of Managed Account i.e., Managed Account and Blackrock go up and down completely randomly.

Pair Corralation between Managed Account and Blackrock

Assuming the 90 days horizon Managed Account Series is expected to generate 0.94 times more return on investment than Blackrock. However, Managed Account Series is 1.07 times less risky than Blackrock. It trades about 0.08 of its potential returns per unit of risk. Blackrock Hi Yld is currently generating about 0.03 per unit of risk. If you would invest  892.00  in Managed Account Series on December 2, 2024 and sell it today you would earn a total of  9.00  from holding Managed Account Series or generate 1.01% return on investment over 90 days.

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

Managed Account Series  vs.  Blackrock Hi Yld

Managed Account Series

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Managed Account Series are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. 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.

Blackrock Hi Yld

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Hi Yld 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 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Managed Account and Blackrock

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

The idea behind Managed Account Series and Blackrock Hi Yld 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.