Correlation Between Blackrock Health and Eic Value

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

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

Diversification Opportunities for Blackrock Health and Eic Value

0.83

Correlation Coefficient

Blackrock Health  Eic Value

Very poor diversification

The 3 months correlation between Blackrock and Eic is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Health Sciences and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Blackrock Health 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 Health Sciences are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Blackrock Health i.e., Blackrock Health and Eic Value go up and down completely randomly.

Pair Corralation between Blackrock Health and Eic Value

Assuming the 90 days horizon Blackrock Health Sciences is expected to under-perform the Eic Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blackrock Health Sciences is 1.26 times less risky than Eic Value. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Eic Value Fund is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  1,862  in Eic Value Fund on October 6, 2024 and sell it today you would lose (172.00) from holding Eic Value Fund or give up 9.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.62%
Values	Daily Returns

Blackrock Health Sciences  vs.  Eic Value Fund

Blackrock Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eic Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Blackrock Health and Eic Value

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

The idea behind Blackrock Health Sciences and Eic Value Fund 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.