Correlation Between SPDR Blackstone and Blackrock ETF

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

By analyzing existing cross correlation between SPDR Blackstone Senior and Blackrock ETF Trust, you can compare the effects of market volatilities on SPDR Blackstone and Blackrock ETF 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 SPDR Blackstone with a short position of Blackrock ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Blackstone and Blackrock ETF.

Diversification Opportunities for SPDR Blackstone and Blackrock ETF

0.91

Correlation Coefficient

SPDR Blackstone  Blackrock ETF

Almost no diversification

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

Pair Corralation between SPDR Blackstone and Blackrock ETF

Given the investment horizon of 90 days SPDR Blackstone Senior is expected to under-perform the Blackrock ETF. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Blackstone Senior is 1.37 times less risky than Blackrock ETF. The etf trades about -0.02 of its potential returns per unit of risk. The Blackrock ETF Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,174  in Blackrock ETF Trust on December 29, 2024 and sell it today you would earn a total of  6.00  from holding Blackrock ETF Trust or generate 0.12% return on investment over 90 days.

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

SPDR Blackstone Senior  vs.  Blackrock ETF Trust

SPDR Blackstone Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Blackstone Senior has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, SPDR Blackstone is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Blackrock ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Blackrock ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SPDR Blackstone and Blackrock ETF

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

The idea behind SPDR Blackstone Senior and Blackrock ETF Trust 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.