Correlation Between Managed Account and Blackrock Alternative

Can any of the company-specific risk be diversified away by investing in both Managed Account and Blackrock Alternative 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 Alternative 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 Alternative Capital, you can compare the effects of market volatilities on Managed Account and Blackrock Alternative 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 Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Managed Account and Blackrock Alternative.

Diversification Opportunities for Managed Account and Blackrock Alternative

0.89

Correlation Coefficient

Managed Account  Blackrock Alternative

Very poor diversification

The 3 months correlation between Managed and Blackrock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Managed Account Series and Blackrock Alternative Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Alternative 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 Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Alternative has no effect on the direction of Managed Account i.e., Managed Account and Blackrock Alternative go up and down completely randomly.

Pair Corralation between Managed Account and Blackrock Alternative

Assuming the 90 days horizon Managed Account Series is expected to generate 0.79 times more return on investment than Blackrock Alternative. However, Managed Account Series is 1.26 times less risky than Blackrock Alternative. It trades about 0.23 of its potential returns per unit of risk. Blackrock Alternative Capital is currently generating about 0.13 per unit of risk. If you would invest  875.00  in Managed Account Series on December 23, 2024 and sell it today you would earn a total of  25.00  from holding Managed Account Series or generate 2.86% return on investment over 90 days.

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

Managed Account Series  vs.  Blackrock Alternative Capital

Managed Account Series

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Managed Account Series are ranked lower than 18 (%) 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 Alternative

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Alternative Capital are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Blackrock Alternative 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 Alternative

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

The idea behind Managed Account Series and Blackrock Alternative Capital 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.