Correlation Between SRH Total and Blackrock Floating

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

By analyzing existing cross correlation between SRH Total Return and Blackrock Floating Rate, you can compare the effects of market volatilities on SRH Total and Blackrock Floating 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 SRH Total with a short position of Blackrock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRH Total and Blackrock Floating.

Diversification Opportunities for SRH Total and Blackrock Floating

-0.55

Correlation Coefficient

SRH Total  Blackrock Floating

Excellent diversification

The 3 months correlation between SRH and Blackrock is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SRH Total Return and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate and SRH Total 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 SRH Total Return are associated (or correlated) with Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of SRH Total i.e., SRH Total and Blackrock Floating go up and down completely randomly.

Pair Corralation between SRH Total and Blackrock Floating

Given the investment horizon of 90 days SRH Total Return is expected to generate 1.38 times more return on investment than Blackrock Floating. However, SRH Total is 1.38 times more volatile than Blackrock Floating Rate. It trades about 0.17 of its potential returns per unit of risk. Blackrock Floating Rate is currently generating about -0.15 per unit of risk. If you would invest  1,578  in SRH Total Return on December 28, 2024 and sell it today you would earn a total of  132.00  from holding SRH Total Return or generate 8.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

SRH Total Return  vs.  Blackrock Floating Rate

SRH Total Return

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SRH Total Return are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, SRH Total may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Blackrock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Blackrock Floating is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SRH Total and Blackrock Floating

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

The idea behind SRH Total Return and Blackrock Floating Rate 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.