Correlation Between Nasdaq-100(r) and Blackrock Conservative

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Blackrock Conservative 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 Nasdaq-100(r) and Blackrock Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Blackrock Conservative Prprdptfinstttnl, you can compare the effects of market volatilities on Nasdaq-100(r) and Blackrock Conservative 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 Nasdaq-100(r) with a short position of Blackrock Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Blackrock Conservative.

Diversification Opportunities for Nasdaq-100(r) and Blackrock Conservative

0.19

Correlation Coefficient

Nasdaq-100(r)  Blackrock Conservative

Average diversification

The 3 months correlation between Nasdaq-100(r) and Blackrock is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Blackrock Conservative Prprdpt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Conservative and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Blackrock Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Conservative has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Blackrock Conservative go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Blackrock Conservative

Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 3.66 times more return on investment than Blackrock Conservative. However, Nasdaq-100(r) is 3.66 times more volatile than Blackrock Conservative Prprdptfinstttnl. It trades about 0.05 of its potential returns per unit of risk. Blackrock Conservative Prprdptfinstttnl is currently generating about -0.16 per unit of risk. If you would invest  54,515  in Nasdaq 100 2x Strategy on October 6, 2024 and sell it today you would earn a total of  2,153  from holding Nasdaq 100 2x Strategy or generate 3.95% return on investment over 90 days.

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

Nasdaq 100 2x Strategy  vs.  Blackrock Conservative Prprdpt

Nasdaq 100 2x

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Nasdaq-100(r) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Blackrock Conservative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nasdaq-100(r) and Blackrock Conservative

The main advantage of trading using opposite Nasdaq-100(r) and Blackrock Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Blackrock Conservative 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 Conservative will offset losses from the drop in Blackrock Conservative's long position.

The idea behind Nasdaq 100 2x Strategy and Blackrock Conservative Prprdptfinstttnl 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.